UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
20549
FORM 10-Q
(Mark One)
[ x ]
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended
May 31, 2011
[ ]
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____to _____
COMMISSION FILE NUMBER
000-52626
PENGRAM CORPORATION
(Exact
name of registrant as specified in its charter)
NEVADA
|
68-0643436
|
(State or other jurisdiction of incorporation or
organization)
|
(I.R.S. Employer Identification No.)
|
|
|
|
|
1200 Dupont Street, Suite 2J
|
|
Bellingham, WA
|
98225
|
(Address of principal executive offices)
|
(Zip Code)
|
(360) 255-3436
(Registrant's telephone number,
including area code)
Not Applicable
(Former name, former address and
former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. [ x ]
Yes
[ ] No
Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation
S-T (§232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such files). [ ] Yes [ ] No
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of large accelerated filer,
accelerated filer and smaller reporting company in Rule 12b-2 of the
Exchange Act.
Large accelerated filer [ ]
|
Accelerated filer [ ]
|
Non-accelerated filer [ ] (Do not check if a smaller
reporting company)
|
Smaller reporting company
[ x ]
|
Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act). Yes[ ]
No
[ x ]
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable date:
As of
July 13, 2011, the Issuer had 58,264,344 Shares of Common Stock
outstanding.
PART I - FINANCIAL INFORMATION
ITEM 1.
|
FINANCIAL STATEMENTS.
|
The accompanying unaudited financial statements have been
prepared in accordance with the instructions to Form 10-Q and Rule 8-03 of
Regulation S-X, and, therefore, do not include all information and footnotes
necessary for a complete presentation of financial position, results of
operations, cash flows, and stockholders' equity in conformity with generally
accepted accounting principles. In the opinion of management, all adjustments
considered necessary for a fair presentation of the results of operations and
financial position have been included and all such adjustments are of a normal
recurring nature. Operating results for the three and six months ended May 31,
2011 are not necessarily indicative of the results that can be expected for the
year ending November 30, 2011.
As used in this Quarterly Report, the terms "we, "us, "our,
Pengram and the Company mean Pengram Corporation and its subsidiaries,
unless otherwise indicated. All dollar amounts in this Quarterly Report are in
U.S. dollars unless otherwise stated.
2
PENGRAM CORPORATION
(An Exploration Stage
Company)
SECOND QUARTER INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
SIX MONTHS ENDED MAY 31, 2011 AND 2010
(Unaudited)
(Stated in U.S. Dollars)
PENGRAM CORPORATION
|
(An Exploration Stage Company)
|
|
INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS
|
(Unaudited)
|
(Stated in U.S. Dollars)
|
|
|
MAY
31
|
|
|
NOVEMBER 30
|
|
|
|
2011
|
|
|
2010
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
|
|
|
|
Cash
|
$
|
15,938
|
|
$
|
353
|
|
Total Current Assets
|
|
15,938
|
|
|
353
|
|
|
|
|
|
|
|
|
Long-term Investment
(Note 3)
|
|
10,367
|
|
|
10,367
|
|
Mineral Property Acquisition Costs
(Note 4)
|
|
372,271
|
|
|
412,875
|
|
|
|
|
|
|
|
|
Total
Assets
|
$
|
398,576
|
|
$
|
423,595
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
|
|
|
|
Accounts
payable and accrued liabilities
|
$
|
321,412
|
|
$
|
340,915
|
|
Amounts due to related
parties (Note 11)
|
|
51,121
|
|
|
49,000
|
|
Amount
due to shareholder
|
|
1,920
|
|
|
1,920
|
|
Promissory notes payable
(Notes 4 and 5)
|
|
147,212
|
|
|
96,248
|
|
Promissory notes payable to related parties (Note 6)
|
|
33,109
|
|
|
25,901
|
|
Loan payable (Note 7)
|
|
5,676
|
|
|
7,015
|
|
Unit
subscriptions received (Note 9)
|
|
14,965
|
|
|
14,965
|
|
Total Current Liabilities
|
|
575,415
|
|
|
535,964
|
|
|
|
|
|
|
|
|
STOCKHOLDERS DEFICIENCY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Stock
(Note 10)
|
|
|
|
|
|
|
Authorized:
100,000,000 preferred stock with a par value of $0.001 per share
300,000,000 common voting stock with a par value of $0.001 per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issued:
58,264,344
at May 31, 2011 and
57,737,144 common shares as at November 30, 2010
|
|
58,264
|
|
|
57,737
|
|
Units and Share Subscriptions Received In Advance
|
|
-
|
|
|
26,360
|
|
Additional Paid-In Capital
|
|
869,285
|
|
|
851,852
|
|
Share Purchase Warrants
(Note 10)
|
|
30,150
|
|
|
21,750
|
|
Deficit Accumulated During The
Exploration Stage
|
|
(1,134,538
|
)
|
|
(1,070,068
|
)
|
Total Stockholders Deficiency
|
|
(176,839
|
)
|
|
(112,369
|
)
|
|
|
|
|
|
|
|
Total
Liabilities And Stockholders Deficiency
|
$
|
398,576
|
|
$
|
423,595
|
|
The accompanying notes are an integral part of these interim
condensed consolidated financial statements.
PENGRAM CORPORATION
|
(An Exploration Stage Company)
|
|
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
|
(Unaudited)
|
(Stated in U.S. Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CUMULATIVE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PERIOD FROM
|
|
|
|
THREE
|
|
|
SIX
|
|
|
INCEPTION
|
|
|
|
MONTHS
|
|
|
MONTHS
|
|
|
APRIL 28
|
|
|
|
ENDED
|
|
|
ENDED
|
|
|
2006 TO
|
|
|
|
MAY 31
|
|
|
MAY 31
|
|
|
MAY 31
|
|
|
|
2011
|
|
|
2010
|
|
|
2011
|
|
|
2010
|
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank charges and interest
|
$
|
4,253
|
|
$
|
6,076
|
|
$
|
7,402
|
|
$
|
11,288
|
|
$
|
48,459
|
|
Consulting fees
|
|
14,050
|
|
|
-
|
|
|
26,350
|
|
|
-
|
|
|
57,826
|
|
Depreciation expense
|
|
-
|
|
|
126
|
|
|
-
|
|
|
252
|
|
|
1,516
|
|
Filing
and regulatory
|
|
744
|
|
|
170
|
|
|
1,967
|
|
|
1,049
|
|
|
20,447
|
|
Finance charges
|
|
-
|
|
|
23,106
|
|
|
-
|
|
|
45,709
|
|
|
137,500
|
|
Incorporation costs
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
3,382
|
|
Investor relations
|
|
-
|
|
|
1,000
|
|
|
-
|
|
|
1,000
|
|
|
15,800
|
|
Management fees
|
|
9,000
|
|
|
9,000
|
|
|
18,000
|
|
|
18,000
|
|
|
146,600
|
|
Mineral
property exploration costs
|
|
28,512
|
|
|
-
|
|
|
26,119
|
|
|
1,569
|
|
|
125,866
|
|
Office
and administrative
|
|
5,479
|
|
|
6,209
|
|
|
11,102
|
|
|
9,629
|
|
|
77,415
|
|
Professional fees
|
|
55,411
|
|
|
48,949
|
|
|
83,256
|
|
|
82,000
|
|
|
598,445
|
|
Recovery on
mineral property
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(18,377
|
)
|
Travel
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
16,341
|
|
Website
design
|
|
682
|
|
|
-
|
|
|
1,044
|
|
|
3,500
|
|
|
5,088
|
|
Write-off
of mineral property costs
|
|
-
|
|
|
3,000
|
|
|
-
|
|
|
3,000
|
|
|
9,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss Before Other Income
|
|
(118,131
|
)
|
|
(97,636
|
)
|
|
(175,240
|
)
|
|
(176,996
|
)
|
|
(1,245,308
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividend
income (Note 3)
|
|
115,909
|
|
|
-
|
|
|
115,909
|
|
|
-
|
|
|
115,909
|
|
Loss on
settlement of debt (Note 3)
|
|
(9,509
|
)
|
|
-
|
|
|
(9,509
|
)
|
|
-
|
|
|
(9,509
|
)
|
Unrealized
gain on marketable securities (Note 3)
|
|
4,370
|
|
|
-
|
|
|
4,370
|
|
|
-
|
|
|
4,370
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss For The Period
|
$
|
(7,361
|
)
|
$
|
(97,636
|
)
|
$
|
(64,470
|
)
|
$
|
(176,996
|
)
|
$
|
(1,134,538
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic And Diluted Loss Per
Share
|
$
|
(0.01
|
)
|
$
|
(0.01
|
)
|
$
|
(0.01
|
)
|
$
|
(0.01
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Number Of
Common Shares
Outstanding
|
|
58,264,344
|
|
|
54,427,905
|
|
|
58,032,608
|
|
|
54,327,419
|
|
|
|
|
The accompanying notes are an integral part of these interim
condensed consolidated financial statements.
PENGRAM CORPORATION
|
(An Exploration Stage Company)
|
|
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS
|
(Unaudited)
|
(Stated in U.S. Dollars)
|
|
|
SIX
|
|
|
CUMULATIVE
|
|
|
|
MONTHS
|
|
|
PERIOD FROM
|
|
|
|
ENDED
|
|
|
INCEPTION APRIL 28
|
|
|
|
MAY 31
|
|
|
2006 TO MAY 31
|
|
|
|
2011
|
|
|
2010
|
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
Cash Provided By (Used In):
|
|
|
|
|
|
|
|
|
|
Operating Activities
|
|
|
|
|
|
|
|
|
|
Net loss
for the period
|
$
|
(64,470
|
)
|
$
|
(176,996
|
)
|
$
|
(1,134,538
|
)
|
Adjustment for items not
affecting cash:
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
-
|
|
|
252
|
|
|
1,516
|
|
Finance charges on convertible notes
|
|
-
|
|
|
45,709
|
|
|
137,500
|
|
Foreign exchange
|
|
-
|
|
|
438
|
|
|
11,369
|
|
Recovery of mineral property
|
|
-
|
|
|
-
|
|
|
(18,377
|
)
|
Accrued interest expense
|
|
6,887
|
|
|
10,999
|
|
|
45,172
|
|
Write-off of mineral property costs
|
|
-
|
|
|
3,000
|
|
|
9,000
|
|
Dividend income
|
|
(115,909
|
)
|
|
-
|
|
|
(115,909
|
)
|
Loss on settlement of dept
|
|
9,509
|
|
|
-
|
|
|
9,509
|
|
Unrealized gain of marketable securities
|
|
(4,370
|
)
|
|
-
|
|
|
(4,370
|
)
|
Changes in non-cash
operating working capital items:
|
|
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
43,934
|
|
|
57,452
|
|
|
360,727
|
|
Amounts due to related parties
|
|
16,511
|
|
|
12,000
|
|
|
65,511
|
|
Prepaid expenses
|
|
-
|
|
|
(11,057
|
)
|
|
-
|
|
|
|
(107,908
|
)
|
|
(58,203
|
)
|
|
(632,890
|
)
|
Investing Activities
|
|
|
|
|
|
|
|
|
|
Advances
|
|
-
|
|
|
-
|
|
|
(10,367
|
)
|
Mineral
property acquisition costs
|
|
-
|
|
|
(42,878
|
)
|
|
(84,075
|
)
|
Recovery of mineral
property costs
|
|
40,604
|
|
|
-
|
|
|
157,681
|
|
Purchase
of computer equipment
|
|
-
|
|
|
-
|
|
|
(1,516
|
)
|
|
|
40,604
|
|
|
(42,878
|
)
|
|
61,723
|
|
Financing Activities
|
|
|
|
|
|
|
|
|
|
Issuance of convertible
notes
|
|
-
|
|
|
-
|
|
|
137,500
|
|
Issuance
of common stock
|
|
-
|
|
|
-
|
|
|
278,981
|
|
Finders fees
|
|
-
|
|
|
(5,042
|
)
|
|
(5,042
|
)
|
Units and
share subscriptions received in advance
|
|
-
|
|
|
67,450
|
|
|
43,825
|
|
Advance on promissory
note payable
|
|
85,500
|
|
|
75,000
|
|
|
160,500
|
|
Repayment
of promissory note
|
|
(14,611
|
)
|
|
-
|
|
|
(67,969
|
)
|
Promissory note payable
to related party
|
|
12,000
|
|
|
-
|
|
|
39,000
|
|
Repayment
of promissory notes payable to related parties
|
|
-
|
|
|
-
|
|
|
(7,000
|
)
|
Advance on loan payable
|
|
-
|
|
|
-
|
|
|
5,390
|
|
Advance
on amount due to shareholder
|
|
-
|
|
|
-
|
|
|
1,920
|
|
|
|
82,889
|
|
|
137,408
|
|
|
587,105
|
|
|
|
|
|
|
|
|
|
|
|
Increase In Cash
|
|
15,585
|
|
|
36,327
|
|
|
15,938
|
|
Cash, Beginning Of Period
|
|
353
|
|
|
3,711
|
|
|
-
|
|
Cash, End Of
Period
|
$
|
15,938
|
|
$
|
40,038
|
|
$
|
15,938
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Disclosure Of Cash Flow Information
|
|
|
|
|
|
|
|
|
|
Cash paid
during the period for:
|
|
|
|
|
|
|
|
|
|
Interest
|
$
|
-
|
|
$
|
-
|
|
$
|
400
|
|
Income taxes
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Non-Cash Financing And Investing
Activities
|
|
|
|
|
|
|
|
|
|
Shares received from
Solfotara Minerals Corp. (Note 3)
|
$
|
-
|
|
$
|
-
|
|
$
|
10,367
|
|
Shares
issued for mineral property acquisition costs (Note 4)
|
$
|
-
|
|
$
|
6,400
|
|
$
|
379,900
|
|
Promissory note payable
for mineral property acquisition costs (Note 4)
|
$
|
-
|
|
$
|
-
|
|
$
|
56,600
|
|
Shares
issued on conversion of convertible note (Note 10)
|
$
|
-
|
|
$
|
10,000
|
|
$
|
137,500
|
|
Shares issued from funds
received in advance (Note 10)
|
$
|
26,360
|
|
$
|
-
|
|
$
|
26,360
|
|
Marketable securities
transferred for settlement debt (Note 3)
|
$
|
110,770
|
|
$
|
-
|
|
$
|
110,770
|
|
The accompanying notes are an integral part of these interim
condensed consolidated financial statements.
PENGRAM CORPORATION
|
(An Exploration Stage Company)
|
|
INTERIM CONDENSED STATEMENTS OF STOCKHOLDERS EQUITY
(DEFICIENCY)
|
|
PERIOD FROM INCEPTION APRIL 28, 2006 TO MAY 31,
2011
|
(Unaudited)
|
(Stated in U.S. Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DEFICIT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ACCUMULATED
|
|
|
|
|
|
|
|
|
|
|
|
|
SHARE
|
|
|
|
|
|
|
|
|
DURING
|
|
|
|
|
|
|
|
|
|
|
|
|
SUBSCRIPTIONS
|
|
|
ADDITIONAL
|
|
|
SHARE
|
|
|
THE
|
|
|
|
|
|
|
COMMON STOCK
|
|
|
RECEIVED
|
|
|
PAID-IN
|
|
|
PURCHASE
|
|
|
EXPLORATION
|
|
|
|
|
|
|
SHARES
|
|
|
AMOUNT
|
|
|
IN
ADVANCE
|
|
|
CAPITAL
|
|
|
WARRANTS
|
|
|
STAGE
|
|
|
TOTAL
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 19, 2006 stock issued for cash at
$0.001
|
|
27,000,000
|
|
$
|
27,000
|
|
$
|
-
|
|
$
|
(18,000
|
)
|
$
|
-
|
|
$
|
-
|
|
$
|
9,000
|
|
Stock issued for cash at $0.01 in private placement
|
|
17,997,144
|
|
|
17,997
|
|
|
-
|
|
|
101,984
|
|
|
-
|
|
|
-
|
|
|
119,981
|
|
Net loss for the period
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(20,112
|
)
|
|
(20,112
|
)
|
Balance, November 30, 2006
|
|
44,997,144
|
|
|
44,997
|
|
|
-
|
|
|
83,984
|
|
|
-
|
|
|
(20,112
|
)
|
|
108,869
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for the year
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(108,384
|
)
|
|
(108,384
|
)
|
Balance, November 30, 2007
|
|
44,997,144
|
|
|
44,997
|
|
|
-
|
|
|
83,984
|
|
|
-
|
|
|
(128,496
|
)
|
|
485
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 4, 2008 units issued for cash
at $0.03
|
|
3,000,000
|
|
|
3,000
|
|
|
-
|
|
|
41,300
|
|
|
35,700
|
|
|
-
|
|
|
80,000
|
|
Net loss for the year
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(139,039
|
)
|
|
(139,039
|
)
|
Balance, November 30, 2008
|
|
47,997,144
|
|
|
47,997
|
|
|
-
|
|
|
125,284
|
|
|
35,700
|
|
|
(267,535
|
)
|
|
(58,554
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock issued for mineral property
|
|
6,000,000
|
|
|
6,000
|
|
|
-
|
|
|
294,000
|
|
|
-
|
|
|
-
|
|
|
300,000
|
|
Relative fair value allocation of convertible notes
|
|
-
|
|
|
-
|
|
|
-
|
|
|
90,021
|
|
|
47,479
|
|
|
-
|
|
|
137,500
|
|
Stock issued under assignment agreement
|
|
150,000
|
|
|
150
|
|
|
-
|
|
|
37,350
|
|
|
-
|
|
|
-
|
|
|
37,500
|
|
Stock issued pursuant to extension agreement
|
|
60,000
|
|
|
60
|
|
|
-
|
|
|
35,940
|
|
|
-
|
|
|
-
|
|
|
36,000
|
|
Share subscriptions received in advance
|
|
-
|
|
|
-
|
|
|
2,500
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
2,500
|
|
Net loss for the year
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(375,580
|
)
|
|
(375,580
|
)
|
Balance, November 30, 2009
|
|
54,207,144
|
|
|
54,207
|
|
|
2,500
|
|
|
582,595
|
|
|
83,179
|
|
|
(643,115
|
)
|
|
79,366
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Units issued for cash at $0.10
|
|
600,000
|
|
|
600
|
|
|
-
|
|
|
37,650
|
|
|
21,750
|
|
|
-
|
|
|
60,000
|
|
Finders fees
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(5,042
|
)
|
|
-
|
|
|
-
|
|
|
(5,042
|
)
|
Exercise of warrants
|
|
150,000
|
|
|
150
|
|
|
(2,500
|
)
|
|
12,350
|
|
|
-
|
|
|
-
|
|
|
10,000
|
|
Expiry of warrants
|
|
-
|
|
|
-
|
|
|
-
|
|
|
83,179
|
|
|
(83,179
|
)
|
|
-
|
|
|
-
|
|
Conversion of convertible notes
|
|
2,750,000
|
|
|
2,750
|
|
|
-
|
|
|
134,750
|
|
|
-
|
|
|
-
|
|
|
137,500
|
|
Stock issued under assignment agreement
|
|
30,000
|
|
|
30
|
|
|
-
|
|
|
6,370
|
|
|
-
|
|
|
-
|
|
|
6,400
|
|
Share subscriptions received in advance
|
|
-
|
|
|
-
|
|
|
26,360
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
26,360
|
|
Net loss for the year
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(426,953
|
)
|
|
(426,953
|
)
|
Balance, November 30, 2010
|
|
57,737,144
|
|
|
57,737
|
|
|
26,360
|
|
|
851,852
|
|
|
21,750
|
|
|
(1,070,068
|
)
|
|
(112,369
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Units issued for cash at $0.05
|
|
527,200
|
|
|
527
|
|
|
(26,360
|
)
|
|
17,433
|
|
|
8,400
|
|
|
-
|
|
|
-
|
|
Net loss for the period
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(64,470
|
)
|
|
(64,470
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, May 31, 2011
|
|
58,264,344
|
|
$
|
58,264
|
|
$
|
-
|
|
$
|
869,285
|
|
$
|
30,150
|
|
$
|
(1,134,538
|
)
|
$
|
(176,839
|
)
|
The accompanying notes are an integral part of these interim
condensed consolidated financial statements.
PENGRAM CORPORATION
|
(An Exploration Stage Company)
|
|
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
|
|
MAY 31, 2011
|
(Unaudited)
|
(Stated in U.S. Dollars)
|
1.
|
BASIS OF PRESENTATION AND NATURE OF
OPERATIONS
|
The unaudited financial information
furnished herein reflects all adjustments, all of which are of a normal
recurring nature, which in the opinion of management are necessary to fairly
state the interim consolidated financial position of Pengram Corporation (the
Company) and the results of its operations for the periods presented. This
report on Form 10-Q should be read in conjunction with the Companys financial
statements and notes thereto included in the Companys Form 10-K for the fiscal
year ended November 30, 2010. The Company assumes that the users of the interim
financial information herein have read or have access to the audited financial
statements for the preceding fiscal year and that the adequacy of additional
disclosure needed for a fair presentation may be determined in that context.
Accordingly, footnote disclosure, which would substantially duplicate the
disclosure contained in the Companys Form 10-K for the fiscal year ended
November 30, 2010, has been omitted. The results of operations for the six month
period ended May 31, 2011 are not necessarily indicative of results for the
entire fiscal year ending November 30, 2011.
Consolidated Financial Statements
These consolidated financial statements
include the accounts of Pengram Corporation (the Company) and its wholly owned
subsidiaries, Magellan Acquisition Corp. (Nevada) (MAC) and Clisbako Minerals
Inc. (British Columbia) (CMI). All intercompany balances have been
eliminated.
Organization
The Company was incorporated in the
State of Nevada, U.S.A., on April 28, 2006. The Companys principal executive
offices are in Bellingham, Washington, U.S.A. The Companys year end is November
30.
Exploration Stage Activities
The Company has been in the exploration
stage since its formation and has not yet realized any revenues from its planned
operations. The Company was formed for the purpose of acquiring exploration and
development stage natural resource properties. The Company has not commenced
business operations. The Company is an exploration stage company as defined in
the Securities and Exchange Commission (S.E.C.) Industry Guide No. 7.
PENGRAM CORPORATION
|
(An Exploration Stage Company)
|
|
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
|
|
MAY 31, 2011
|
(Unaudited)
|
(Stated in U.S. Dollars)
|
1.
|
BASIS OF PRESENTATION AND NATURE OF OPERATIONS
(Continued)
|
|
|
|
|
Going Concern
|
|
|
|
|
The accompanying financial statements have been prepared
assuming the Company will continue as a going concern.
|
|
|
|
|
As shown in the accompanying financial statements, the
Company has incurred a net loss of $1,134,538 for the period from April
28, 2006 (inception) to May 31, 2011, and has no revenues. These factors
raise substantial doubt about the Companys ability to continue as a going
concern. The future of the Company is dependent upon its ability to obtain
financing and upon future profitable operations from the development of
its natural resource properties. Management has plans to seek additional
capital through a private placement and public offering of its common
stock. The financial statements do not include any adjustments relating to
the recoverability and classification of recorded assets, or the amounts
of and classification of liabilities that might be necessary in the event
the Company cannot continue in existence.
|
|
|
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
|
|
|
|
|
The financial statements of the Company have been
prepared in accordance with generally accepted accounting principles in
the United States. Because a precise determination of many assets and
liabilities is dependent upon future events, the preparation of financial
statements for a period necessarily involves the use of estimates which
have been made using careful judgement.
|
|
|
|
|
The financial statements have, in managements opinion,
been properly prepared within the framework of the significant accounting
policies summarized below:
|
|
|
|
|
a)
|
Organization and Start-up Costs
|
|
|
|
|
|
Costs of start up activities, including organizational
and incorporation costs, are expensed as incurred.
|
|
|
|
|
b)
|
Exploration Stage Enterprise
|
|
|
|
|
|
The Companys financial statements are prepared using the
accrual method of accounting. Until such properties are acquired and
developed, the Company will continue to prepare its financial statements
and related disclosures in accordance with entities in the exploration
stage.
|
PENGRAM CORPORATION
|
(An Exploration Stage Company)
|
|
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
|
|
MAY 31, 2011
|
(Unaudited)
|
(Stated in U.S. Dollars)
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
|
|
|
|
|
c)
|
Mineral Property Interests
|
|
|
|
|
|
The Company is an exploration stage mining company and
has not yet realized any revenue from its operations. It is primarily
engaged in the acquisition, exploration and development of mining
properties. Exploration costs are expensed as incurred regardless of the
stage of development or existence of reserves. Costs of acquisition are
capitalized subject to impairment testing when facts and circumstances
indicate impairment may exist. Proceeds received from the sale of any
interest in a property will first be credited against the carrying value
of the property, with any excess included in operations for the
period.
|
|
|
|
|
|
The Company regularly performs evaluations of any
investment in mineral properties to assess the recoverability and/or the
residual value of its investments in these assets. All long-lived assets
are reviewed for impairment whenever events or circumstances change which
indicate the carrying amount of an asset may not be recoverable.
|
|
|
|
|
|
Management periodically reviews the carrying value of its
investments in mineral leases and claims with internal and external mining
related professionals. A decision to abandon, reduce or expand a specific
project is based upon many factors including general and specific
assessments of mineral deposits, anticipated future mineral prices,
anticipated future costs of exploring, developing and operating a
producing mine, the expiration term and ongoing expenses of maintaining
mineral properties and the general likelihood that the Company will
continue exploration on such project. The Company does not set a
pre-determined holding period for properties with unproven deposits,
however, properties which have not demonstrated suitable metal
concentrations at the conclusion of each phase of an exploration program
are re-evaluated to determine if future exploration is warranted, whether
there has been any impairment in value and that their carrying values are
appropriate.
|
|
|
|
|
|
If an area of interest is abandoned or it is determined
that its carrying value cannot be supported by future production or sale,
the related costs are charged against operations in the year of
abandonment or determination of value. The amounts recorded as mineral
leases and claims represent costs to date and do not necessarily reflect
present or future values.
|
|
|
|
|
|
The Companys exploration activities are subject to
various laws and regulations governing the protection of the environment.
These laws are continually changing, generally becoming more restrictive.
The Company has made, and expects to make in the future, expenditures to
comply with such laws and regulations.
|
PENGRAM CORPORATION
|
(An Exploration Stage Company)
|
|
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
|
|
MAY 31, 2011
|
(Unaudited)
|
(Stated in U.S. Dollars)
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
|
|
|
|
|
|
c)
|
Mineral Property Interests (Continued)
|
|
|
|
|
|
|
The accumulated costs of properties that are developed on
the stage of commercial production will be amortized to operations through
unit-of-production depletion.
|
|
|
|
|
|
d)
|
Cash
|
|
|
|
|
|
|
Cash consists primarily of cash on deposit.
|
|
|
|
|
|
e)
|
Investments
|
|
|
|
|
|
|
Investments in securities of publicly traded companies
are measured at fair value. Resulting gains or losses are recognized in
the statement of operations.
|
|
|
|
|
|
|
Investments in securities of private companies that do
not have a quoted market price on a recognized securities exchange are
recorded at cost. Investments are written-down when, in the opinion of
management, there has been an impairment in their value which is other
than temporary and such impairment is recorded in the statement of
operations.
|
|
|
|
|
|
f)
|
Computer Equipment
|
|
|
|
|
|
|
Computer equipment is recorded at cost and will be
depreciated over an estimated useful life of three years on a
straight-line basis.
|
|
|
|
|
|
g)
|
Financial Instruments
|
|
|
|
|
|
|
The Companys financial instruments include cash,
accounts payable and accrued liabilities, amounts due to related parties,
amount due to shareholder, promissory notes payable, promissory notes
payable to related parties, loan payable and convertible notes. All such
instruments are carried at cost, which, due to the short maturity of these
financial instruments, approximate fair value at May 31, 2011.
|
|
|
|
|
|
h)
|
Foreign Currency Translation
|
|
|
|
|
|
|
The Companys functional currency is the US dollar.
Transactions in a foreign currency are translated into U.S. dollars as
follows:
|
|
|
|
|
|
|
i)
|
monetary items are translated at the exchange rate
prevailing at the balance sheetdate;
|
|
|
ii)
|
non-monetary items are translated at the historical exchange
rate;
|
|
|
iii)
|
revenue and expense items are translated at the average
rate in effect during the applicable accounting
period.
|
PENGRAM CORPORATION
|
(An Exploration Stage Company)
|
|
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
|
|
MAY 31, 2011
|
(Unaudited)
|
(Stated in U.S. Dollars)
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
|
|
|
|
|
i)
|
Use of Estimates
|
|
|
|
|
|
The preparation of financial statements, in conformity
with generally accepted accounting principles, requires management to make
estimates and assumptions that affect the amounts reported in the
financial statements and accompanying disclosures. Actual results may
differ from the estimates.
|
|
|
|
|
j)
|
Basic and Diluted Loss Per Share
|
|
|
|
|
|
Basic loss per common share is computed by dividing net
loss available to common stockholders by the weighted average number of
common shares outstanding. Diluted loss per common share is computed
similar to basic loss per common share except that the denominator is
increased to include the number of additional common shares that would
have been outstanding if the potential common shares had been issued and
if the additional common shares were dilutive.
|
|
|
|
|
|
The following outstanding share purchase warrants were
excluded from the diluted EPS computation as their effect would have been
anti-dilutive:
|
|
|
MAY 31
|
|
|
NOVEMBER 30
|
|
|
|
2011
|
|
|
2010
|
|
|
|
|
|
|
|
|
Share purchase warrants
|
|
1,127,200
|
|
|
600,000
|
|
|
k)
|
Income Taxes
|
|
|
|
|
|
The Company uses an asset and liability approach for
financial accounting and reporting on income taxes. If it is more likely
than not that some portion or all of a deferred tax asset will not be
realized, a valuation allowance is recognized.
|
|
|
|
|
l)
|
Impairment of Long-Lived Assets
|
|
|
|
|
|
The Company records impairment losses on long-lived
assets used in operations when indicators of impairment are present and
the undiscounted cash flows estimated to be generated by those assets are
less than the assets carrying amount. In such cases, the amount of the
impairment is determined based on the relative fair values of the impaired
assets. The Company tests the recoverability of the assets whenever events
or changes in circumstances indicate that its carrying amount may not be
recoverable.
|
PENGRAM CORPORATION
|
(An Exploration Stage Company)
|
|
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
|
|
MAY 31, 2011
|
(Unaudited)
|
(Stated in U.S. Dollars)
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
|
|
|
|
|
m)
|
Asset Retirement Obligations
|
|
|
|
|
|
An asset retirement obligation (ARO) is a legal
obligation associated with the retirement of a tangible long-lived asset
and is recognized as a liability in the period which it is incurred and
becomes determinable, with an offsetting increase in the carrying amount
of the associated asset.
|
|
|
|
|
|
The cost of the tangible asset, including the initially
recognized ARO, is depleted, such that the cost of the ARO is recognized
over the useful life of the asset. The ARO is recorded at fair value, and
accretion expense is recognized over time as the discounted liability is
accreted to its expected settlement value. The fair value of the ARO is
measured using expected future cash flows, discounted at the Companys
credit-adjusted risk-free interest rate. To date, no significant asset
retirement obligation exists due to the early stage of exploration.
Accordingly, no liability has been recorded.
|
|
|
|
|
n)
|
Share-based Compensation
|
|
|
|
|
|
The Company accounts for stock-based compensation under
the provisions of the Financial Accounting Standards Board (FASB)
Accounting Standards Codification (ASC) 718, Stock Compensation, which
requires the recognition of the fair value of stock-based compensation.
Under the fair value recognition provisions for ASC 718, stock-based
compensation cost is estimated at the grant date based on the fair value
of the awards expected to vest and recognized as expense ratably over the
requisite service period of the award. The Company has used the
Black-Scholes valuation model to estimate fair value of its stock-based
awards which requires various judgmental assumptions including estimating
stock price volatility and expected life. The Companys computation of
expected volatility is based on a combination of historical and market-
based volatility. In addition, the Company considers many factors when
estimating expected life, including types of awards and historical
experience. If any of the assumptions used in the Black-Scholes valuation
model change significantly, stock- based compensation expense may differ
materially in the future from that recorded in the current
period.
|
|
|
|
|
|
The Company accounts for equity instruments issued in
exchange for the receipt of goods or services from other than employees in
accordance with ASC 718 and the conclusions reached by ASC 505-50. Costs
are measured at the estimated fair market value of the consideration
received or the estimated fair value of the equity instruments issued,
whichever is more reliably measurable. The value of equity instruments
issued for consideration other than employee services is determined on the
earliest of a performance commitment or completion of performance by the
provider of goods or services as defined by ASC
505-50.
|
PENGRAM CORPORATION
|
(An Exploration Stage Company)
|
|
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
|
|
MAY 31, 2011
|
(Unaudited)
|
(Stated in U.S. Dollars)
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
|
|
|
|
|
o)
|
Environmental Protection and Reclamation Costs
|
|
|
|
|
|
The operations of the Company have been, and may in the
future be affected from time to time in varying degrees by changes in
environmental regulations, including those for future removal and site
restorations costs. Both the likelihood of new regulations and their
overall effect upon the Company may vary from region to region and are not
predictable.
|
|
|
|
|
|
Environmental expenditures that relate to ongoing
environmental and reclamation programs are charged to the statements of
operations as incurred or capitalized and amortized depending upon their
future economic benefits. The Company does not currently anticipate any
material capital expenditures for environmental control facilities because
its property holding is at an early stage of exploration.
|
|
|
|
|
p)
|
Fair Value of Financial Instruments
|
|
|
|
|
|
Fair value is defined as the price that would be received
to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date in the principal or
most advantageous market.
|
|
|
|
|
|
The Company uses a three-tier fair value hierarchy which
prioritizes the inputs used in measuring fair value as
follows:
|
|
Level 1:
|
Observable inputs such as quoted prices in active
markets;
|
|
|
|
|
Level 2:
|
Inputs, other than the quoted prices in active markets,
that are observable either directly or indirectly; and
|
|
|
|
|
Level 3:
|
Unobservable inputs in which there is little or no market
data, which require the reporting entity to develop its own assumptions.
|
The Company did not have any fair
value adjustments for assets and liabilities measured at fair value on a
nonrecurring basis during the six month period ended May 31, 2011.
PENGRAM CORPORATION
|
(An Exploration Stage Company)
|
|
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
|
|
MAY 31, 2011
|
(Unaudited)
|
(Stated in U.S. Dollars)
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
|
|
|
|
|
p)
|
Fair Value of Financial Instruments (Continued)
|
|
|
|
|
|
The following table presents information about the
Companys financial instruments that have been measured at fair value as
of May 31, 2011, and indicates the fair value hierarchy of the valuation
inputs utilized to determine such fair values:
|
|
|
|
|
|
|
QUOTED
|
|
|
SIGNIFICANT
|
|
|
|
|
|
|
|
FAIR VALUE
|
|
|
PRICES
|
|
|
OTHER
|
|
|
|
|
|
|
|
AT
|
|
|
IN ACTIVE
|
|
|
OBSERVABLE
|
|
|
UNOBSERVABLE
|
|
|
|
|
MAY 31
|
|
|
MARKETS
|
|
|
INPUTS
|
|
|
INPUTS
|
|
|
DESCRIPTION
|
|
2011
|
|
|
(LEVEL 1)
|
|
|
(LEVEL 2)
|
|
|
(LEVEL 3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
|
$
|
15,938
|
|
$
|
15,938
|
|
$
|
-
|
|
$
|
-
|
|
|
Financial assets measured at fair value at
May 31, 2011
|
$
|
15,938
|
|
$
|
15,938
|
|
$
|
-
|
|
$
|
-
|
|
|
q)
|
Recent Accounting Pronouncements
|
|
|
|
|
|
In May 2011, the FASB issued new authoritative guidance
to provide a consistent definition of fair value and ensure that fair
value measurements and disclosure requirements are similar between GAAP
and International Financial Reporting Standards. This guidance changes
certain fair value measurement principles and enhances the disclosure
requirements for fair value measurements. This guidance is effective for
interim and annual periods beginning after December 15, 2011 and is
applied prospectively. The Company does not expect that the adoption of
this guidance will have a material impact on its financial
statements.
|
PENGRAM CORPORATION
|
(An Exploration Stage Company)
|
|
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
|
|
MAY 31, 2011
|
(Unaudited)
|
(Stated in U.S. Dollars)
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
|
|
q)
|
Recent Accounting Pronouncements
(Continued)
|
In April 2010, the FASB provided an
update to address the classification of an employee share-based payment award
with an exercise price denominated in the currency of a market in which the
underlying equity security trades. FASB Accounting Standards Codification Topic
718, CompensationStock Compensation, provides guidance on the classification of
a share-based payment award as either equity or a liability. A share-based
payment award that contains a condition that is not a market, performance, or
service condition is required to be classified as a liability. This standard is
effective for fiscal years beginning after December 15, 2010, and for subsequent
interim and annual reporting periods thereafter. The Company does not expect the
adoption of this standard to have a significant effect on the Company's results
of operations or financial position.
In January 2010, the FASB issued ASU
2010-06,
Fair Value Measurements and Disclosures (Topic 820), Improving
Disclosures about Fair Value Measurements,
amending ASC 820. ASU 2010-06
requires entities to provide new disclosures and clarify existing disclosures
relating to fair value measurements. The new disclosures and clarifications of
existing disclosures are effective for interim and annual reporting periods
beginning after December 15, 2009, except for the disclosures about purchases,
sales, issuances, and settlements in Level 3 fair value measurements, which are
effective for fiscal years beginning after December 15, 2010 and for interim
periods within those fiscal years. The Company is currently evaluating the
impact of ASU 2010-06, but does not expect its adoption to have a material
impact on the Companys financial position or results of operations
.
In October 2009, the FASB issued ASU
2009-13,
Revenue Recognition (Topic 605), Multiple-Deliverable Revenue
Arrangements
amending ASC 605. ASU 2009-13 requires entities to allocate
revenue in an arrangement using estimated selling prices of the delivered goods
and services based on a selling price hierarchy. ASU 2009-13 eliminates the
residual method of revenue allocation and requires revenue to be allocated using
the relative selling price method. ASU 2009-13 is effective prospectively for
revenue arrangements entered into or materially modified in fiscal years
beginning on or after June 15, 2010. The adoption did not have a material impact
on the Companys financial position or results of operations.
Management does not believe any other
recently issued but not yet effective accounting pronouncements, if adopted,
would have an effect on the accompanying financial statements.
PENGRAM CORPORATION
|
(An Exploration Stage Company)
|
|
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
|
|
MAY 31, 2011
|
(Unaudited)
|
(Stated in U.S. Dollars)
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
|
|
|
|
q)
|
Recent Accounting Pronouncements (Continued)
|
|
|
3.
|
LONG-TERM INVESTMENT
|
|
|
|
In the year ended November 30, 2009, the Company received
250,000 common shares in Solfotara Mining Corp. (Solfotara), a private
Canadian company as consideration for transferring its interest in an
option agreement to Solfotara. The total value attributed to the common
stock received from Solfotara was $10,367.
|
|
|
|
Solfotara undertook a corporate reorganization, whereby
it spun out a certain project to Copper Development Corporation (CDC) in
consideration for publicly traded shares in CDC.
|
|
|
|
These marketable securities were distributed to
Solfotaras shareholders on March 24, 2011. Accordingly, the Company
received 209,000 shares in CDC, having a fair value of $115,909. This
receipt was recognized as dividend income in the statement of
operations.
|
|
|
|
On April 21, 2011, the Company settled $110,770 of debt
by transferring its ownership in the 209,000 CDC shares which had a value
of $120,279. The settlement of debt was allocated as
follows:
|
Accounts payable and accured liabilities
|
$
|
64,448
|
|
Amounts due to related parties
|
|
14,390
|
|
Promissory notes payable
|
|
24,459
|
|
Promissory notes payable to related parties
|
|
5,883
|
|
Loan payable
|
|
1,590
|
|
|
|
|
|
|
$
|
110,770
|
|
As result of this settlement, the
Company recorded a loss on settlement of debt of $9,509 and an unrealized gain
on the marketable securities of $4,370 in the statement of operations.
PENGRAM CORPORATION
|
(An Exploration Stage Company)
|
|
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
|
|
MAY 31, 2011
|
(Unaudited)
|
(Stated in U.S. Dollars)
|
4.
|
MINERAL PROPERTY ACQUISITION
COSTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECOVERY
|
|
|
|
|
|
|
|
NOVEMBER 30
|
|
|
|
|
|
ABANDONED,
|
|
|
|
|
|
RECOGNIZED
|
|
|
MAY 31
|
|
|
|
|
2010
|
|
|
ADDITIONS
|
|
|
IMPAIRED
|
|
|
RECOVERY
|
|
|
AS
INCOME
|
|
|
2011
|
|
|
Mineral Property
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Clisbako claims (a)
|
$
|
350,350
|
|
$
|
-
|
|
$
|
-
|
|
$
|
(40,604
|
)
|
$
|
-
|
|
$
|
309,746
|
|
|
Eureka claims (b)
|
|
62,525
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
62,525
|
|
|
Elko claims (e)
|
|
-
|
|
|
10,000
|
|
|
(10,000
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
412,875
|
|
$
|
10,000
|
|
$
|
(10,000
|
)
|
$
|
(40,604
|
)
|
$
|
-
|
|
$
|
372,271
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECOVERY
|
|
|
|
|
|
|
|
NOVEMBER 30
|
|
|
|
|
|
ABANDONED,
|
|
|
|
|
|
RECOGNIZED
|
|
|
NOVEMBER 30
|
|
|
|
|
2009
|
|
|
ADDITIONS
|
|
|
IMPAIRED
|
|
|
RECOVERY
|
|
|
AS
INCOME
|
|
|
2010
|
|
|
Mineral Property
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Clisbako claims (a)
|
$
|
392,600
|
|
$
|
6,400
|
|
$
|
-
|
|
$
|
(48,650
|
)
|
$
|
-
|
|
$
|
350,350
|
|
|
Eureka claims (b)
|
|
47,500
|
|
|
15,025
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
62,525
|
|
|
Manado Gold claims (c)
|
|
-
|
|
|
50,050
|
|
|
-
|
|
|
(68,427
|
)
|
|
18,377
|
|
|
-
|
|
|
June claims (d)
|
|
-
|
|
|
3,000
|
|
|
(3,000
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
440,100
|
|
$
|
74,475
|
|
$
|
(3,000
|
)
|
$
|
(117,077
|
)
|
$
|
18,377
|
|
$
|
412,875
|
|
|
a)
|
Clisbako Claims
|
|
|
|
|
|
On December 16, 2008, the Company entered into a purchase
agreement to acquire an undivided 100% interest in a group of ten mineral
claims (collectively known as the Clisbako claims) located in the
Cariboo Mining Division of British Columbia, Canada. Consideration for the
claims was 6,000,000 shares (issued see Note 10(a)) of the Companys
common stock with a value of $300,000 and the issuance to the vendor of a
promissory note in the amount of CDN$70,000 (US$56,600) payable June 30,
2009. On July 23, 2009, the Company reached an agreement with the vendor
to extend the deadline of the CDN$70,000 mineral property payment
(Property Payment) to December 31, 2009. In consideration of the
extension of the deadline, the Company issued 60,000 common shares to the
vendor with a fair value of $36,000.
|
|
|
|
|
|
On January 21, 2010, the Company reached an agreement
with the vendor to further extend the due date of the Property Payment to
February 15, 2010. In consideration of the further extension of the
deadline, the Company issued 10,000 shares of its common stock to the
vendor with a value of $4,200.
|
|
|
|
|
|
On March 15, 2010, the Company entered into a third
extension agreement dated for reference February 15, 2010, with the vendor
to extend the Property Payment from February 15, 2010 to June 30, 2010. In
consideration of the extension, the Company issued to the vendor 20,000
common shares with a value of $2,200.
|
PENGRAM CORPORATION
|
(An Exploration Stage Company)
|
|
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
|
|
MAY 31, 2011
|
(Unaudited)
|
(Stated in U.S. Dollars)
|
4.
|
MINERAL PROPERTY ACQUISITION COSTS
(Continued)
|
|
a)
|
Clisbako Claims
(Continued)
|
On September 15, 2010, and as amended
by letter agreement dated November 15, 2010, the Company, through its wholly
owned subsidiary, CMI., entered into an option agreement (the "Clisbako Option
Agreement") with Manado Gold Corp., which has two common directors with the
Company, whereby the Company granted Manado Gold Corp. the sole and exclusive
right and option to acquire a 75% undivided interest in the Clisbako Property.
Under the terms of the Option Agreement, Manado Gold Corp. will exercise its
option upon completing the following:
|
1.
|
Paying an aggregate of $150,000 to CMI. as
follows:
|
|
(a)
|
$50,000 on execution of the agreement (CDN$50,000 or
US$48,650 has been paid);
|
|
|
|
|
(b)
|
a further $50,000 on or before February 28, 2011 (paid
CDN$40,000 or US$40,604); and
|
|
|
|
|
(c)
|
a further $50,000 on or before April 30, 2011. (By
agreement dated April 30, 2011 with Manado Gold Corp., the Company has
agreed to waive payment, in exchange to terminate an assigned option with
respect to the Manado property. See Note 4 (c)).
|
|
2.
|
Issuing an aggregate of 600,000 Shares to CMI as
follows:
|
|
(a)
|
100,000 Shares on or before September 15, 2011;
|
|
|
|
|
(b)
|
a further 200,000 Shares on or before September
15, 2012; and
|
|
|
|
|
(c)
|
a further 300,000 Shares on or before September
15, 2013.
|
|
3.
|
Incurring Exploration Expenditures of CDN$650,000 on the
Clisbako Property as follows:
|
|
(a)
|
CDN$100,000 on or before September 15, 2011;
|
|
|
|
|
(b)
|
a further CDN$300,000 on or before September 15, 2012;
and
|
|
|
|
|
(c)
|
a further CDN$250,000 on or before September 15,
2013.
|
Manado Gold Corp. will also be
responsible to make all government payments required to keep the claims in good
standing.
PENGRAM CORPORATION
|
(An Exploration Stage Company)
|
|
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
|
|
MAY 31, 2011
|
(Unaudited)
|
(Stated in U.S. Dollars)
|
4.
|
MINERAL PROPERTY ACQUISITION COSTS
(Continued)
|
|
|
|
|
|
b)
|
Eureka Claims
|
|
|
|
|
|
|
On May 29, 2009, the Company entered into an assignment
agreement to acquire an undivided 100% interest in a series of mineral
claims referred to as the CPG Project, Fish Claims and The Golden Snow
Property (collectively known as the Eureka claims) situated in the
Eureka County, Esmeralda County and Mineral County, Nevada. Consideration
for the claims was as follows:
|
|
|
|
|
|
|
i)
|
150,000 common shares (issued) with a value of
$37,500;
|
|
|
|
|
|
|
ii)
|
$10,000 advance royalty payment due on or before August
28, 2009 (paid);
|
|
|
|
|
|
|
iii)
|
$15,000 advance royalty payment due on or before August
28, 2010 (paid);
|
|
|
|
|
|
|
iv)
|
$20,000 advance royalty payment due on or before August
28, 2011;
|
|
|
|
|
|
|
v)
|
$25,000 advance royalty payment due on or before August
28, 2012;
|
|
|
|
|
|
|
vi)
|
$30,000 advance royalty payment due on or before August
28, 2013, with an additional $30,000 due each year thereafter for a period
of ten years, with an option to renew for an additional ten
years.
|
|
|
|
|
|
|
The Company entered into three property agreements dated
as of April 26, 2011 covering the Golden Snow Property, the CPG Project
and the Fish Claims to replace the single agreement covering these mineral
properties.
|
|
|
|
|
|
|
CPG Project
|
|
|
|
|
|
|
The Company entered into an agreement dated as of March
31, 2011 with Claremont Nevada Mines LLC (Claremont) to earn a 100%
undivided interest (the CPG Option) in the CPG Project by:
|
|
|
|
|
|
|
(a)
|
paying to the Claremont advance royalty payments as
follows:
|
|
|
|
|
|
|
|
i) $4,100
on or before August 28, 2011;
|
|
|
|
|
|
|
|
ii)
$5,100 on or before August 28, 2012; and
|
|
|
|
|
|
|
|
iii) $6,200
on or before August 28, 2013.
|
PENGRAM CORPORATION
|
(An Exploration Stage Company)
|
|
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
|
|
MAY 31, 2011
|
(Unaudited)
|
(Stated in U.S. Dollars)
|
4.
|
MINERAL PROPERTY ACQUISITION COSTS
(Continued)
|
|
|
|
|
|
|
b)
|
Eureka Claims
(Continued)
|
|
|
|
|
|
|
|
CPG Project (Continued
|
|
|
|
|
|
|
|
(b)
|
paying to Claremont, during the term of the option,
$1,000 in connection with the delivery by the Company to Claremont
of:
|
|
|
|
|
|
|
|
|
(i)
|
a copy of a mine plan of operations in respect of the
property which is approved by the lead government agency having
responsibility for such approval; and
|
|
|
|
|
|
|
|
|
(ii)
|
a final feasibility study in respect of the property that
is approved by the Companys management.
|
The term of the CPG Option expires
August 28, 2013, but may be extended for five years by paying $6,200 in each
subsequent year. The Company is also obligated to pay all county and BLM claim
fees and Nevada state taxes during the currency of the agreement.
The CPG Project is subject to a
royalty of 3% net smelter returns upon the commencement of commercial
production. At any time the Company may reduce the royalty as follows:
|
(a)
|
to 1% by paying $1,000,000 to the royalty holder;
or
|
|
|
|
|
(b)
|
to 2% by paying $500,000 to the royalty
holder.
|
Fish Claims
The Company entered into an agreement
dated as of March 31, 2011 with Claremont to earn a 100% undivided interest (the
Fish Option) in the Fish Claims by:
|
(a)
|
paying to Claremont advance royalty payments as
follows:
|
|
|
|
|
|
|
i)
|
$5,400 on or before August 28, 2011;
|
|
|
|
|
|
|
ii)
|
$6,800 on or before August 28, 2012; and
|
|
|
|
|
|
|
iii)
|
$8,100 on or before August 28,
2013.
|
PENGRAM CORPORATION
|
(An Exploration Stage Company)
|
|
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
|
|
MAY 31, 2011
|
(Unaudited)
|
(Stated in U.S. Dollars)
|
4.
|
MINERAL PROPERTY ACQUISITION COSTS
(Continued)
|
|
|
|
|
|
|
b)
|
Eureka Claims
(Continued)
|
|
|
|
|
|
|
|
Fish Claims (Continued)
|
|
|
|
|
|
|
|
(b)
|
paying to Claremont, during the term of the option,
$1,000 in connection with the delivery by the Company to Claremont
of:
|
|
|
|
|
|
|
|
|
(i)
|
a copy of a mine plan of operations in respect of the
property which is approved by the lead government agency having
responsibility for such approval; and
|
|
|
|
|
|
|
|
|
(ii)
|
a final feasibility study in respect of the property that
is approved by the Companys management.
|
The term of the Fish Option expires
August 28, 2013, but may be extended for five years by paying $8,100 in each
subsequent year. The Company is also obligated to pay all county and BLM claim
fees and Nevada state taxes during the currency of the agreement.
The Fish Claims are subject to a
royalty of 3% net smelter returns upon the commencement of commercial
production. At any time the Company may reduce the royalty as follows:
|
(a)
|
to 1% by paying $1,000,000 to the royalty holder;
or
|
|
|
|
|
(b)
|
to 2% by paying $500,000 to the royalty
holder.
|
Golden Snow Property
The Company entered into an agreement
dated as of March 31, 2011 with Scoonover Exploration LLC and JR Exploration LLC
(collectively, the Golden Snow Optionors) to earn a 100% undivided interest
(the Golden Snow Option) in the Golden Snow Property by:
|
(a)
|
paying to the Golden Snow Optionors advance royalty
payments as follows:
|
|
|
|
|
|
|
i)
|
$10,600 on or before August 28, 2011;
|
|
|
|
|
|
|
ii)
|
$13,200 on or before August 28, 2012; and
|
|
|
|
|
|
|
iii)
|
$15,900 on or before August 28,
2013.
|
PENGRAM CORPORATION
|
(An Exploration Stage Company)
|
|
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
|
|
MAY 31, 2011
|
(Unaudited)
|
(Stated in U.S. Dollars)
|
4.
|
MINERAL PROPERTY ACQUISITION COSTS
(Continued)
|
|
|
|
|
|
|
b)
|
Eureka Claims
(Continued)
|
|
|
|
|
|
|
|
Golden Snow Property (Continued)
|
|
|
|
|
|
|
|
(b)
|
paying to the Golden Snow Optionors, during the term of
the option, $1,000 in connection with the delivery by the Company to the
Golden Snow Optionors of:
|
|
|
|
|
|
|
|
|
(i)
|
a copy of a mine plan of operations in respect of the
property which is approved by the lead government agency having
responsibility for such approval; and
|
|
|
|
|
|
|
|
|
(ii)
|
a final feasibility study in respect of the property that
is approved by the Optionees management.
|
The term of the Golden Snow Option
expires August 28, 2013, but may be extended for five years by paying $15,900 in
each subsequent year. The Company is also obligated to pay all county and BLM
claim fees and Nevada state taxes during the currency of the agreement.
The Golden Snow Property is subject to
a royalty of 3% net smelter returns upon the commencement of commercial
production. At any time the Company may reduce the royalty as follows:
|
(a)
|
to 1% by paying $1,000,000 to the royalty holder;
or
|
|
|
|
|
(b)
|
to 2% by paying $500,000 to the royalty
holder.
|
Agreement with Terrace Ventures
Inc. (Golden Snow Property)
On April 26, 2011, the Company entered
into an agreement (the "Earn-In Agreement") with Terrace Ventures
Inc.(Terrace). Under the terms of the Earn-In Agreement, Terrace will earn up
to a 75% interest in the Companys agreement with the Golden Snow Optionors (the
Underlying Agreement) by paying the Company up to $175,000 and expending up to
$1,750,000 in exploration expenditures on the Golden Snow Property as
follows:
|
(a)
|
The first 25% interest in the Underlying Agreement upon
Terrace:
|
|
|
|
|
|
|
(i)
|
paying the Company $25,000 by way of a non-interest
bearing Promissory Note due 45 days from the date of the Earn-In
Agreement, subsequent to period-end the Promissory Note was extended to
September 27, 2011. In consideration of this extension, the Note
will bear interest of 10% per annum calculated from April 26,
2011;
|
PENGRAM CORPORATION
|
(An Exploration Stage Company)
|
|
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
|
|
MAY 31, 2011
|
(Unaudited)
|
(Stated in U.S. Dollars)
|
4.
|
MINERAL PROPERTY ACQUISITION COSTS
(Continued)
|
|
|
|
|
|
|
b)
|
Eureka Claims
(Continued)
|
|
|
|
|
|
|
|
Agreement with Terrace Ventures Inc. (Golden Snow
Property) (Continued)
|
|
|
|
|
|
|
|
(a)
|
The first 25% interest in the Underlying Agreement upon
Terrace: (Continued)
|
|
|
|
|
|
|
|
|
(ii)
|
completing exploration expenditures on the Property
totalling $250,000 by July 31, 2012.
|
|
|
|
|
|
|
|
(b)
|
An additional 25% interest in the Underlying Agreement
upon Terrace:
|
|
|
|
|
|
|
|
|
(i)
|
paying the Company $50,000 on or before May 31,
2013;
|
|
|
|
|
|
|
|
|
(ii)
|
completing exploration expenditures on the Property
totalling $500,000 by July 31, 2013.
|
|
|
|
|
|
|
|
(c)
|
An additional 25% interest in the Underlying Agreement
upon Terrace:
|
|
|
|
|
|
|
|
|
(i)
|
paying the Company $100,000 on or before May 31,
2014;
|
|
|
|
|
|
|
|
|
(ii)
|
completing exploration expenditures on the Property
totalling $1,000,000 by July 31, 2014.
|
|
|
Terrace is also obligated to pay all advance royalties,
county and BLM claim fees and Nevada state taxes during the currency of
the Earn-In Agreement.
|
|
|
|
|
c)
|
Manada Gold Claims
|
|
|
|
|
|
On January 19, 2010 the Company entered into an option
agreement to acquire interests in four mineral claims (collectively known
as the Manado Gold claims) in the Lobongan District of Northern
Sulawesi, Indonesia. The Company paid $35,000 for this option agreement
and then entered into an acquisition agreement to purchase an 85% in the
Manado gold claims over a three year period. Terms of the acquisition
agreement were for the Company to earn an initial 10% interest to pay a
cash payment of $90,000 (paid $15,050), issue 150,000 shares of the
Companys stock (not issued) and complete an exploration program of at
least $250,000 (not completed); to earn a further 15% pay a cash payment
of $100,000, issue 300,000 shares of the Companys stock, and complete an
additional $500,000 exploration program; to earn a further 26% interest
pay $200,000, issue 500,000 shares of the Companys stock and incur a
further $1,000,000 in exploration expenditures; the final 34% interest
upon completion of a scoping study on the
claims.
|
PENGRAM CORPORATION
|
(An Exploration Stage Company)
|
|
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
|
|
MAY 31, 2011
|
(Unaudited)
|
(Stated in U.S. Dollars)
|
4.
|
MINERAL PROPERTY ACQUISITION COSTS
(Continued)
|
|
|
|
|
c)
|
Manada Gold Claims
(Continued)
|
|
|
|
|
|
In August 2010, the Company entered into an agreement
with Manado Gold Corp. (Manado Gold) to earn a 75% interest in the
Companys 85% interest. Manado Gold agreed to reimburse the Company
$80,000 (received $68,427), carry out the exploration expenditures
required under the original acquisition agreement and to issue the Company
950,000 shares of its capital stock to the Company.
|
|
|
|
|
|
On April 30, 2011, the optionors of the mineral property
agreed to have the Company terminate its agreement with Manado Gold, in
return the Company agreed to waive the payment of $50,000 in respect of
the Clisbako property due April 30, 2011 (note 4 (a)) from Manado
Gold.
|
|
|
|
|
|
As at May 31, 2011, the Company has abandoned its pursuit
of an interest in the acquisition agreement.
|
|
d)
|
June Claims
|
|
|
|
|
|
|
On February 5, 2010, the Company entered into an option
agreement to acquire an undivided 100% interest in a series of mineral
claims (collectively known as the June claims) situated in the Alberni
Mining Division of British Columbia, Canada. Consideration for the claims
is as follows:
|
|
|
|
|
|
|
i)
|
Payment of $3,000 due on February 5, 2010
(paid);
|
|
|
|
|
|
|
ii)
|
Payment of $10,000 due on or before May 6,
2010;
|
|
|
|
|
|
|
iii)
|
Payment of $10,000 and the issuance of 100,000 shares of
the Companys common stock due on or before February 5, 2011;
|
|
|
|
|
|
|
iv)
|
Payment of $10,000 and the issuance of 100,000 shares of
the Companys common stock due on or before February 5, 2012;
|
|
|
|
|
|
|
v)
|
Payment of $10,000 and the issuance of 100,000 shares of
the Companys common stock due on or before February 5, 2013.
|
|
|
|
|
|
|
During the year ended November 30, 2010, the Company
abandoned and wrote off all costs incurred with respect to the June
property.
|
PENGRAM CORPORATION
|
(An Exploration Stage Company)
|
|
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
|
|
MAY 31, 2011
|
(Unaudited)
|
(Stated in U.S. Dollars)
|
4.
|
MINERAL PROPERTY AND ACQUISITION COSTS
(Continued)
|
|
|
|
|
e)
|
Elko Claims
|
|
|
|
|
|
On April 13, 2011, the Company acquired a 30-day
exclusive right to negotiate with Development Resources LLC, a Delaware
limited liability company, for the acquisition of 54 mineral claims
located in Elko County, Nevada. The Company paid $10,000 to Development
Resources LLC to acquire the exclusive right. This right expired
unexercised on May 20, 2011.
|
|
|
|
5.
|
PROMISSORY NOTES PAYABLE
|
|
|
|
|
a)
|
On January 11, 2010, the Company entered into a
promissory note agreement whereby it borrowed $75,000 from an arms length
party. The note bears interest at 10% per annum, is unsecured and
repayable on demand. As at May 31, 2011, a total of $10,109 (November 30,
2010 - $6,637) has been accrued as interest on this note.
|
|
|
|
|
|
On April 21, 2011, the Company settled $24,459 of the
promissory note by way of exchange of marketable securities for debt. See
Note 3.
|
|
|
|
|
b)
|
Pursuant to a purchase agreement to acquire the Clisbako
claims outlined in Note 4(a), the Company issued a promissory note in the
amount of CDN$70,000 (translated to US$65,913 as at November 30, 2009)
payable June 30, 2009. The promissory note is unsecured and free of
interest. During the year ended November 30, 2009, the Company reached an
agreement with the vendor to extend the deadline of the promissory note to
December 31, 2009.
|
|
|
|
|
|
During the year ended November 30, 2010, the Company
obtained various extensions from the vendor to postpone the Property
Payment. The Company repaid CDN$55,000 on the promissory note. During the
six month period ended May 31, 2011, the Company repaid the remaining
balance of CDN$15,000 of the promissory note.
|
|
|
|
|
c)
|
During the six month period ended May 31, 2011, the
Company entered into additional promissory note agreements, whereby it
borrowed an additional $85,500 from arms length parties. These notes bear
interest at 10% per annum, are unsecured and are repayable on demand. As
at May 31, 2011, total interest of $1,062 has been accrued on these
outstanding notes.
|
PENGRAM CORPORATION
|
(An Exploration Stage Company)
|
|
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
|
|
MAY 31, 2011
|
(Unaudited)
|
(Stated in U.S. Dollars)
|
6.
|
PROMISSORY NOTES PAYABLE TO RELATED
PARTIES
|
|
|
|
|
a)
|
On December 19, 2007, the Company entered into a
promissory note agreement whereby it borrowed $20,000. The note is
unsecured, repayable on demand and bears interest at 10% per annum,
payable annually. As at May 31, 2011, a total of $6,834 (November 30, 2010
- $5,901) has been accrued as interest payable on the loan. During the
year ended November 30, 2008, the owner of the company holding the
promissory note became an officer and director of the Company.
|
|
|
|
|
|
On April 21, 2011, the Company settled $5,883 of the
promissory note by way of marketable securities for debt exchange. See
Note 3.
|
|
|
|
|
b)
|
On April 13, 2011, the Company entered into a promissory
note agreement, whereby it borrowed $12,000 from a related party. This
note bears interest of 10% per annum, is unsecured and is repayable on
demand. As at May 31, 2011, total interest of $158 has been accrued on
this note.
|
|
|
|
7.
|
LOAN PAYABLE
|
|
|
|
|
On October 1, 2008, the Company received a loan from an
arms length party of $10,000. The loan is unsecured, repayable on demand
and bears interest at 10% per annum, payable annually. During the year
ended November 30, 2009, the Company paid back $4,610 of this balance. As
at May 31, 2011, a total of $1,876 (November 30, 2010 - $1,625) has been
accrued as interest payable on the loan.
|
|
|
|
|
On April 21, 2011, the Company settled $1,590 of the loan
by way of exchange of marketable securities for debt. See Note
3.
|
|
|
|
8.
|
CONVERTIBLE NOTES
|
|
|
|
|
On April 30, 2009, the Company issued 55, $2,500
Convertible Notes (the notes) in the aggregate amount of $137,500 due
and payable on or before October 31, 2010, with interest charged at the
rate of 10% per annum payable annually. Attached to the Notes were 550,000
share purchase warrants (10,000 attached to each of the 55 notes). Each
warrant entitles the holder to purchase three shares of the Companys
common stock for a period expiring one year from the date of issuance of
the notes at an exercise price of $0.25 ($0.083 per share). At the
election of the holder, the notes and interest accrued thereon are
convertible into such number of shares of the Companys common stock as
shall be equal to the principal amount of the convertible note to be
converted divided by $0.05. Conversion of the notes does not affect the
warrants.
|
PENGRAM CORPORATION
|
(An Exploration Stage Company)
|
|
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
|
|
MAY 31, 2011
|
(Unaudited)
|
(Stated in U.S. Dollars)
|
8.
|
CONVERTIBLE NOTES
(Continued)
|
|
|
|
During the year ended November 30, 2008, the Company had
received $67,500 towards the convertible notes offering. During the year
end November 30, 2009, the Company received the remaining $70,000 towards
this offering.
|
|
|
|
The Company has allocated the proceeds received between
the notes and the detachable warrants on a relative fair value basis. The
fair value of the warrants was estimated using the Black-Scholes option
pricing model at the date of issue with the following weighted average
assumptions: expected dividend yield of 0%; average risk free interest
rate of 0.63%; expected volatility of 229% and a term of 1.0 year. The
fair value of the notes was estimated by multiplying the number of shares
that would result from an immediate exercise of the conversion option, by
the market price on the date of issue. The relative fair values of the
notes and the warrants determine the debt discount attributable to the
warrants. The result was $47,479 of the proceeds being allocated to the
warrants and $90,021 being allocated to the notes. The resulting discount
on the notes is amortized over the term of the notes to maturity such
that, in the absence of any conversions, the carrying value of the notes
at maturity would be equal to the face amount of $137,500. In the event of
a conversion of any, or all, of the face amount of the notes, the
proportionate amount of the unamortized discount as of the date of
conversion is immediately charged to operations.
|
|
|
|
In accordance with the provisions of ASC 470 20, the
Company determined the intrinsic value of the beneficial conversion
feature on the notes by comparing the market price of the Companys common
stock at issuance of the notes to the effective conversion price of the
notes, as determined by dividing the proceeds allocated to the notes by
the number of shares that would result from an immediate exercise of the
conversion option. The initial beneficial conversion feature was
determined to be $734,250; however, in accordance with the provisions of
ASC 470 20, it is limited to the proceeds allocated to the notes, being
$90,021. This beneficial conversion feature was recorded as an immediate
charge to additional paid-in capital and a further discount on the
convertible note carrying value. This further discount is to be amortized
over the term of the notes to maturity. In the event of a conversion of
any, or all, of the face amount of the notes, the proportionate amount of
the unamortized beneficial conversion feature as of the date of conversion
is immediately charged to operations.
|
|
|
|
During the year ended November 30, 2010, the Company
recorded as finance charges, $28,964 of amortization (May 31, 2010 -
$15,783) of the discount resulting from the allocation of proceeds to the
warrants and a further $54,917 (May 31, 2010 - $29,925) of the intrinsic
value of the beneficial conversion feature, leaving total unamortized
amounts of $Nil (May 31, 2010 - $38,173). The accrued interest of $24,122
remains unpaid as of May 31, 2011 and November 30, 2010, and is included
in accounts payable and accrued liabilities.
|
PENGRAM CORPORATION
|
(An Exploration Stage Company)
|
|
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
|
|
MAY 31, 2011
|
(Unaudited)
|
(Stated in U.S. Dollars)
|
8.
|
CONVERTIBLE NOTES
(Continued)
|
|
|
|
|
|
During the year ended November 30, 2010, the entire
principal of $137,500 was converted into 2,750,000 shares of the Companys
common stock.
|
|
|
|
|
9.
|
UNIT SUBSCRIPTIONS RECEIVED
|
|
|
|
|
|
During the year ended November 30, 2010, the Company
received $14,965 in subscription funds in connection with a private
placement mentioned above. Due to the provision in the subscription
agreements that the subscription funds will constitute non-interest
bearing demand loans to the Company in the event the subscriptions are not
accepted by the Company, the Company classified the unit subscriptions
received in advance as current liabilities.
|
|
|
|
|
10.
|
CAPITAL STOCK
|
|
|
|
|
|
a)
|
Common Stock
|
|
|
|
|
|
|
On June 19, 2006, the Company issued 27,000,000 common
shares to the Companys founder (9,000,000 pre-stock split shares at a
price of $0.001 for gross proceeds of $9,000).
|
|
|
|
|
|
|
During the year ended November 30, 2006, pursuant to a
private placement, the Company issued 17,997,144 common shares (5,999,048
pre-stock split shares at a price of $0.02 for gross proceeds of
$119,981).
|
|
|
|
|
|
|
During the year ended November 30, 2008, the Company
received $80,000 from completing a private placement of 3,000,000 units
(1,000,000 pre-stock split units at a price of $0.08 per unit). Each unit
was comprised of one share of the Companys common stock and one share
purchase warrant. Each warrant entitles the subscriber to purchase one
share of the Companys common stock for a period expiring two years from
the date of issue at an exercise price of $0.033 per share.
|
|
|
|
|
|
|
During the year ended November 30, 2009, the Company
completed the following stock transactions:
|
|
|
|
|
|
|
|
issued 6,000,000 common shares pursuant to a mineral
property purchase agreement (see Note 4). The Company recorded these
shares at a price of $0.05 per share for a total value of
$300,000;
|
PENGRAM CORPORATION
|
(An Exploration Stage Company)
|
|
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
|
|
MAY 31, 2011
|
(Unaudited)
|
(Stated in U.S. Dollars)
|
10.
|
CAPITAL STOCK
(Continued)
|
|
|
|
|
|
a)
|
Common Stock (Continued)
|
|
|
|
|
|
|
|
issued 150,000 common shares pursuant to a mineral
property assignment agreement (see Note 4). The Company recorded these
shares at a price of $0.25 per share for a total value of $37,500;
and
|
|
|
|
|
|
|
|
issued 60,000 common shares pursuant to an extension to a
mineral property purchase agreement (see Note 4). The Company recorded
these shares at a price of $0.60 per share for a total value of
$36,000.
|
|
|
|
|
|
|
During the year ended November 30, 2010, the Company
completed the following stock transactions:
|
|
|
|
|
|
|
|
issued 600,000 units for total proceeds of $60,000 in
relation to a private placement. Each unit consists of one common share
and one share purchase warrant, each whole warrant entitling the holder
thereof to purchase an additional common share at a price of $0.15 for a
period of two years.
|
|
|
|
|
|
|
|
issued 150,000 common shares from exercise of
warrants;
|
|
|
|
|
|
|
|
issued 2,750,000 common shares with a value of $137,500
pursuant to the conversion of convertible notes (see Note 8);
|
|
|
|
|
|
|
|
issued 30,000 common shares with a value of $6,400
pursuant to an extension to a mineral property purchase agreement (see
Note 4);
|
|
|
|
|
|
|
The Company approved a private offering of up to
3,000,000 units (the Units) at a price of $0.05 per unit for gross
proceeds of up to $150,000. The Company received in advance 527,200 units
for proceeds of $26,360 which were issued during the period ended May 31,
2011. Each unit consists of one common share and one share purchase
warrant, each whole warrant entitling the holder thereof to purchase an
additional common share at a price of $0.10 for a period of two
years.
|
|
|
|
|
|
b)
|
Share Purchase Warrants
|
|
|
|
|
|
|
As at May 31, 2011 share purchase warrants were
outstanding for the purchase of common shares as
follows:
|
NUMBER OF
|
EXERCISE
|
|
WARRANTS
|
PRICE
|
EXPIRY DATE
|
|
|
|
500,000
|
$ 0.15
|
July 20, 2012
|
100,000
|
$ 0.15
|
August 4, 2012
|
527,200
|
$ 0.10
|
February 18, 2013
|
|
|
|
1,127,200
|
|
|
PENGRAM CORPORATION
|
(An Exploration Stage Company)
|
|
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
|
|
MAY 31, 2011
|
(Unaudited)
|
(Stated in U.S. Dollars)
|
10.
|
CAPITAL STOCK
(Continued)
|
|
|
|
|
b)
|
Share Purchase Warrants (Continued)
|
|
|
|
|
|
A summary of changes in share purchase warrants for the
periods ended November 30, 2010 and May 31, 2011 is presented
below:
|
|
|
NUMBER OF
|
|
|
WEIGHTED AVERAGE
|
|
|
|
WARRANTS
|
|
|
EXERCISE PRICE
|
|
|
|
|
|
|
|
|
Balance, November 30, 2009
|
|
4,650,000
|
|
$
|
0.05
|
|
Granted
|
|
600,000
|
|
$
|
0.15
|
|
Exercised
|
|
(150,000
|
)
|
$
|
(0.083
|
)
|
Expired
|
|
(4,500,000
|
)
|
$
|
(0.05
|
)
|
|
|
|
|
|
|
|
Balance, November 30, 2010
|
|
600,000
|
|
$
|
0.15
|
|
Granted
|
|
527,200
|
|
$
|
0.10
|
|
|
|
|
|
|
|
|
Balance, May 31, 2011
|
|
1,127,200
|
|
$
|
0.13
|
|
The fair value of the warrants issued
in connection with the private placement during the year ended November 30, 2010
was measured at the award date using the Black-Scholes option pricing model with
the following weighted average assumptions: expected dividend yield of 0%;
average risk free interest rate of 1.46%; expected volatility of 168% and a term
of 2 years. Of the total proceeds, $21,750 was allocated to share purchase
warrants.
The fair value of the warrants issued
in connection with the private placement during the six month period ended May
31, 2011 was measured at the award date using the Black-Scholes option pricing
model with the following weighted average assumptions: expected dividend yield
of 0%; average risk free interest rate of 0.78%; expected volatility of 202% and
a term of 2 years. Of the total proceeds, $8,400 was allocated to share purchase
warrants.
PENGRAM CORPORATION
|
(An Exploration Stage Company)
|
|
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
|
|
MAY 31, 2011
|
(Unaudited)
|
(Stated in U.S. Dollars)
|
10.
|
CAPITAL STOCK
(Continued)
|
|
|
|
|
c)
|
Stock Options
|
|
|
|
|
|
On March 1, 2011, the Company adopted its 2011 Stock
Incentive Plan (the 2011 Plan). The 2011 Plan provides for the issuance
of incentive and non-qualified shares of the Company's stock to officers,
directors, employees, and non-employees. A total of 5,500,000 shares of
the Companys common stock are available for issuance under the Plan. The
exercise price must not be less than: (i) 80% of market price of the
Company's common stock in respect of non-qualified stock options; and (ii)
market price of the Company's common stock in respect of incentive stock
options. The options can be granted for a maximum term of 10 years and
vest as determined by the Board of Directors.
|
|
|
|
11.
|
RELATED PARTY TRANSACTIONS
|
|
|
|
|
As of May 31, 2011, the Company is indebted to the
following additional related parties otherwise not disclosed in previous
notes:
|
|
|
|
|
i)
|
Included in due to related parties is a loan payable to a
member of the board of directors of MAC of $497 (November 30, 2010 -
$Nil);
|
|
|
|
|
ii)
|
Included in due to related parties is a loan payable to a
company owned by a member of the board of directors of MAC of $1,013
(November 30, 2010 - $Nil).
|
|
|
|
|
The amounts due to the related parties are unsecured,
non-interest bearing with no fixed terms of repayment.
|
|
|
|
|
During the six months ended May 31, 2011, the Company
paid or accrued $18,000 (2010 - $18,000) for management fees to the board
of directors of MAC.
|
|
|
|
|
On April 21, 2011, outstanding management fees
aggregating $14,390 were settled by the Company by the transferring of
marketable securities to related parties. See Note 3.
|
|
|
|
|
These transactions with related parties were in the
normal course of operations and were measured at the exchange value which
represented the amount of consideration established and agreed to by the
parties.
|
|
|
|
12.
|
COMMITMENTS AND CONTRACTUAL OBLIGATIONS
|
|
|
|
|
The Company has no significant commitments or contractual
obligations with any parties respecting executive compensation, consulting
arrangements or other matters. Rental of premises and investor relations
services are provided on a month-to-month
basis.
|
PENGRAM CORPORATION
|
(An Exploration Stage Company)
|
|
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
|
|
MAY 31, 2011
|
(Unaudited)
|
(Stated in U.S. Dollars)
|
13.
|
SEGMENT INFORMATION
|
|
|
|
The Company has one reportable operating segment, being
the acquisition and exploration of mineral properties. Details of
identifiable assets by geographic segments are as
follows:
|
|
|
MINERAL
|
|
|
|
PROPERTY
|
|
|
|
INTERESTS
|
|
|
|
|
|
May 31 2011
|
|
|
|
USA
|
$
|
62,525
|
|
Canada
|
|
309,746
|
|
|
$
|
372,271
|
|
|
|
MINERAL
|
|
|
|
PROPERTY
|
|
|
|
INTERESTS
|
|
|
|
|
|
November 30, 2010
|
|
|
|
USA
|
$
|
62,525
|
|
Canada
|
|
350,350
|
|
|
|
|
|
|
$
|
412,875
|
|
14.
|
SUBSEQUENT EVENTS
|
|
|
|
Subsequent to May 31, 2011, the Company entered into two
promissory note agreements whereby it borrowed $28,346 from an arms
length party. Each note bears interest at 10% per annum, is unsecured and
is repayable on demand.
|
ITEM 2.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
|
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
STATEMENTS
Certain statements contained in this Quarterly Report
constitute "forward-looking statements. These statements, identified by words
such as plan, "anticipate, "believe, "estimate, "should, "expect" and
similar expressions include our expectations and objectives regarding our future
financial position, operating results and business strategy. These statements
reflect the current views of management with respect to future events and are
subject to risks, uncertainties and other factors that may cause our actual
results, performance or achievements, or industry results, to be materially
different from those described in the forward-looking statements. Such risks and
uncertainties include those set forth under the caption "Part II - Item 1A. Risk
Factors and elsewhere in this Quarterly Report. We advise you to carefully
review the reports and documents we file from time to time with the United
States Securities and Exchange Commission (the SEC), particularly our periodic
reports filed with the SEC pursuant to the Securities Exchange Act of 1934 (the
Exchange Act).
OVERVIEW
We were incorporated on April 28, 2006 under the laws of the
State of Nevada.
Our business plan is to assemble a portfolio of mineral
properties with gold potential and to engage in the exploration and development
of these properties. We currently have an option to acquire a 100% interest in
certain mineral properties known as the Fish Project in Esmeralda County, Nevada
and the CPG Project in Mineral County, Nevada. We also have an option to acquire
the Golden Snow Property in Eureka County, Nevada, which is subject to a 75%
earn-in by Terrace Ventures Inc.
We hold 100% title in ten contiguous mineral claims covering an
area of approximately 3,388 hectares (the Clisbako Property) located in the
Interior Plateau Region of north central British Columbia. On September 15,
2010, Clisbako Minerals Inc. (Clisbako) entered into an option agreement (the
Clisbako Option Agreement) with Manado Gold Corp. (Manado Corp.) whereby we
granted Manado Corp. the sole and exclusive right and option to acquire a 75%
undivided interest in the Clisbako Property. Under the terms of the Clisbako
Option Agreement, Manado Corp. will exercise its option upon paying Clisbako an
aggregate of USD $150,000, issuing 600,000 shares of Manado Corp.s common stock
and incurring CAD $650,000 in exploration expenditures on the Clisbako Property
in stages over a three year period.
We previously held an option to acquire the Manado Gold
Property located 50 miles south of Manado in northern Sulawesi, Indonesia. On
April 10, 2011, we received a notice from a party purporting to represent Agus
Abidin, the vendor of the Manado Gold Property. The notice purports to cancel
our rights under the letter agreement dated November 2, 2009 (the "Agreement")
alleging that we failed to meet the requirements under the Agreement. Under the
terms of the Agreement, we had elected to exercise our right to enter into a
formal agreement to acquire the Manado Gold Property; however, the vendor, Mr.
Abidin, had not met legal requirements to convert the tenures under which the
Manado Gold Property is held into the new form of tenure required by the new
Indonesian mining laws which is necessary to permit us to acquire our interest.
Despite numerous requests by us to Mr. Abidin and his representatives, this was
never accomplished by him. Because of the delays on the part of the vendor, we
had already determined to focus on our North American properties. Based on the
notice received, we are now considering legal action against the vendor. We have
advanced a total of $50,000 to the vendor.
Based on the potential and current state of development, we
have decided to focus our resources on the Fish Project and CPG Project.
3
RECENT CORPORATE DEVELOPMENTS
We experienced the following corporate developments since the
filing of our Quarterly Report on Form 10-Q for the fiscal Quarter ended
February 28, 2011:
1.
|
Effective April 21, 2011, Bryan Wilson resigned as a
member of our Board of Directors. To fill the vacancy created by his
resignation, we appointed Howard Metzler as a member of our Board of
Directors. There were no disagreements between with Mr. Wilson regarding
any matter relating to the Companys operations, policies or
practices.
|
|
|
2.
|
On April 26, 2011, we entered into three property
agreements dated as of March 31, 2011 covering our Golden Snow, CPG and
Fish Properties located in Nevada. The three properties were previously
held under a single agreement. The three new agreements are on
substantially the same terms, but allow us to acquire each property
independently and permit us to enter into agreements for joint venture
financing of exploration programs on a property-by-property basis. See
CPG Project, Fish Claims and Golden Snow Property below.
|
|
|
3.
|
We entered into an agreement with Terrace Ventures Inc.
dated April 26, 2011 (the "Earn-In Agreement"). Under the terms of the
Earn-In Agreement, Terrace will earn up to a 75% interest in the Companys
agreement with the Golden Snow Optionors (the Underlying Agreement) by
paying to the Company up to $175,000 and expending up to $1,750,000 to do
exploration work on the Golden Snow Property. See Agreement with Terrace
Ventures Inc. below.
|
|
|
4.
|
On May 12, 2011, we entered into an amendment to the
letter agreement dated April 13, 2011 with Development Resources LLC
granting us the exclusive right to negotiate the acquisition of 54 mineral
claims located in the Long Canyon area of Elko County, Nevada. Under the
terms of the amendment agreement, Development Resources LLC, the owner of
the mineral claims, agreed to extend the exclusivity period for an
additional 7 days to permit negotiations to be completed. We were unable
to reach an agreement with Development Resources LLC by the end of the
exclusivity period.
|
|
|
5.
|
We settled approximately $110,000 of outstanding
indebtedness of the Company and our wholly-owned subsidiary, Magellan
Acquisition Corp. ("Magellan"), by transferring our 209,000 shares of
Copper Development Corp. held by Magellan to certain creditors of the
Company and Magellan, including $7,923.50 of indebtedness to Richard W.
Donaldson, our President, $5,883.00 of indebtedness to Kahala Financial
Corp. a company controlled by Mr. Donaldson, $6,174.50 of indebtedness to
Don Archibald, a director of Magellan and $291.50 of indebtedness to David
K. Ryan, a director of Magellan. For the purposes of the settlement, the
shares of Copper Development Corp. were valued based on their trading
price on the London AIM Market of approximately $0.55 per
share.
|
CPG PROJECT
The CPG Project consists of 44 unpatented lode mining claims in
the Walker Lane of Western Nevada. Under the terms of the agreement between us
and Claremont Nevada Mines LLC (the CPG Optionor), we have the right to earn a
100% undivided interest (the CPG Option) in the CPG Project by:
(a)
|
paying to the CPG Optionor advance royalty payments as
follows:
|
|
|
|
|
(i)
|
$4,100 on or before August 28, 2011;
|
|
|
|
|
(ii)
|
$5,100 on or before August 28, 2012; and
|
|
|
|
|
(iii)
|
$6,200 on or before August 28, 2013.
|
|
|
|
(b)
|
paying to the CPG Optionor, during the term of the
option, $1,000 in connection with the delivery by the Company to the CPG
Optionor of:
|
|
|
|
|
(i)
|
a copy of a mine plan of operations in respect of the
property which is approved by the lead government agency having
responsibility for such approval; and
|
4
|
(ii)
|
a final feasibility study in respect of the property that
is approved by the Companys management.
|
The term of the CPG Option expires August 28, 2013, but may be
extended for five years by paying $6,200 in each subsequent year. We are also
obligated to pay all county and BLM claim fees and Nevada state taxes during the
currency of the agreement.
The CPG Project is subject to a royalty of 3% net smelter
returns upon the commencement of commercial production. At any time the Company
may reduce the royalty as follows:
(a)
|
to 1% by paying $1,000,000 to the royalty holder;
or
|
|
|
(b)
|
to 2% by paying $500,000 to the royalty
holder.
|
FISH CLAIMS
The Fish Claims consists of 58 unpatented lode mining claims in
the Lone Mountain Mining District of Esmeralda County, Nevada. Under the terms
of the agreement between us and Claremont Nevada Mines LLC (the Fish
Optionor), the Company has the right to earn a 100% undivided interest (the
Fish Option) in the Fish Claims by:
(a)
|
paying to the Fish Optionor advance royalty payments as
follows:
|
|
|
|
|
(i)
|
$5,400 on or before August 28, 2011;
|
|
|
|
|
(ii)
|
$6,800 on or before August 28, 2012; and
|
|
|
|
|
(iii)
|
$8,100 on or before August 28, 2013.
|
|
|
|
(b)
|
paying to the Fish Optionor, during the term of the
option, $1,000 in connection with the delivery by the Company to the Fish
Optionor of:
|
|
|
|
|
(i)
|
a copy of a mine plan of operations in respect of the
property which is approved by the lead government agency having
responsibility for such approval; and
|
|
|
|
|
(ii)
|
a final feasibility study in respect of the property that
is approved by the Companys management.
|
The term of the Fish Option expires August 28, 2013, but may be
extended for five years by paying $8,100 in each subsequent year. We are also
obligated to pay all county and BLM claim fees and Nevada state taxes during the
currency of the agreement.
The Fish Claims are subject to a royalty of 3% net smelter
returns upon the commencement of commercial production. At any time the Company
may reduce the royalty as follows:
(a)
|
to 1% by paying $1,000,000 to the royalty holder;
or
|
|
|
(b)
|
to 2% by paying $500,000 to the royalty
holder.
|
GOLDEN SNOW PROPERTY
The Golden Snow Property consists of 83 mineral claims located
in the Eureka Mining District in Eureka County, Nevada. Under the terms of the
agreement among the Company, Scoonover Exploration LLC and JR Exploration LLC
(collectively, the Golden Snow Optionors), the Company has the right to earn a
100% undivided interest (the Golden Snow Option) in the Golden Snow Property
by:
(a)
|
paying to the Golden Snow Optionors advance royalty
payments as follows:
|
5
|
(i)
|
$10,600 on or before August 28, 2011;
|
|
|
|
|
(ii)
|
$13,200 on or before August 28, 2012; and
|
|
|
|
|
(iii)
|
$15,900 on or before August 28, 2013.
|
|
|
|
(b)
|
paying to the Golden Snow Optionors, during the term of
the option, $1,000 in connection with the delivery by the Company to the
Golden Snow Optionors of:
|
|
|
|
|
(i)
|
a copy of a mine plan of operations in respect of the
property which is approved by the lead government agency having
responsibility for such approval; and
|
|
|
|
|
(ii)
|
a final feasibility study in respect of the property that
is approved by the Companys management.
|
The term of the Golden Snow Option expires August 28, 2013, but
may be extended for five years by paying $15,900 in each subsequent year. The
Company is also obligated to pay all county and BLM claim fees and Nevada state
taxes during the currency of the agreement.
The Golden Snow Property is subject to a royalty of 3% net
smelter returns upon the commencement of commercial production. At any time the
Company may reduce the royalty as follows:
(a)
|
to 1% by paying $1,000,000 to the royalty holder;
or
|
|
|
(b)
|
to 2% by paying $500,000 to the royalty
holder.
|
Agreement with Terrace Ventures Inc. (Golden Snow
Property)
We entered into an agreement with Terrace Ventures Inc. dated
April 26, 2011, as amended on June 29, 2011, (the "Earn-In Agreement) whereby
Terrace will earn up to a 75% interest in our agreement with the Golden Snow
Optionors (the Underlying Agreement) by paying us up to $175,000 and expending
up to $1,750,000 to do exploration work on the Golden Snow Property as
follows:
(a)
|
The first 25% interest in the Underlying Agreement upon
Terrace:
|
|
|
|
|
(i)
|
paying the Company $25,000 by way of a promissory note,
bearing interest at a rate of 10% per annum, due on September 27,
2011;
|
|
|
|
|
(ii)
|
completing exploration expenditures on the Property
totalling $250,000 by July 31, 2012.
|
|
|
|
(b)
|
An additional 25% interest in the Underlying Agreement
upon Terrace:
|
|
|
|
|
(i)
|
paying the Company $50,000 on or before May 31,
2013;
|
|
|
|
|
(ii)
|
completing exploration expenditures on the Property
totalling $500,000 by July 31, 2013:
|
|
|
|
(c)
|
An additional 25% interest in the Underlying Agreement
upon Terrace:
|
|
|
|
|
(i)
|
paying the Company $100,000 on or before May 31,
2014;
|
|
|
|
|
(ii)
|
completing exploration expenditures on the Property
totalling $1,000,000 by July 31, 2014.
|
Terrace is also obligated to pay all advance royalties, county
and BLM claim fees and Nevada state taxes during the currency of the Earn-In
Agreement.
PLAN OF OPERATION
Over the next twelve months, our plan of operation is to focus
our resources on the exploration of the CPG Project and the Fish Claims. Subject
to obtaining sufficient financing, we plan to retain a consulting geologist to
conduct a review of these properties in order to recommend an
exploration program to be conducted in summer 2011. Once our consulting
geologist has provided us with their findings, we will determine whether to
proceed with an exploration program on these properties.
6
During the next twelve months, we will be required to make a
number of payments in order to maintain our options to acquire the CPG Project,
Fish Claims and Golden Snow Property. Under the terms of our options to acquire
the CPG Project, Fish Claims and Golden Snow Property, in order to keep them in
good standing, we are required to pay: (i) Claremont and the Golden Snow
Optionors option payments totaling $20,100 by August 28, 2011; and (ii) Bureau
of Land Management maintenance and claim fees of approximately $32,583 by
September 1, 2011. If we are unable to make the payments to Claremont, the
Golden Snow Optionors, the Bureau of Land Management or pay the annual
maintenance claim fees, we will lose our interest in the CPG Project, Fish
Claims and Golden Snow Property.
As the agreement is an option, we may decide at any time not to
proceed in which case we would not be liable to pay any funds beyond the amounts
due at the time we provide notice that we are not proceeding. There is no
assurance that we will exercise the option.
As at May 31, 2011, we had $15,938 cash on hand. Accordingly,
we have insufficient cash on hand to proceed with our exploration on the CPG
Project, Fish Claims and Golden Snow Property, and meet our ongoing operating
costs. As such, we will require substantial financing in order to meet our
obligations. There is no assurance that we will be able to acquire such
financing on terms that are acceptable to us, or at all.
RESULTS OF OPERATIONS
Three and Six Months Summary
|
|
Three
|
|
|
Three
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Months
|
|
|
Months
|
|
|
Percentage
|
|
|
Six Months
|
|
|
Six Months
|
|
|
Percentage
|
|
|
|
Ended May
|
|
|
Ended May
|
|
|
Increase /
|
|
|
Ended May
|
|
|
Ended May
|
|
|
Increase /
|
|
|
|
31,
2011
|
|
|
31,
2010
|
|
|
(Decrease)
|
|
|
31,
2011
|
|
|
31,
2010
|
|
|
(Decrease)
|
|
Revenue
|
$
|
Nil
|
|
$
|
Nil
|
|
|
n/a
|
|
$
|
Nil
|
|
$
|
Nil
|
|
|
n/a
|
|
Expenses
|
|
(118,131
|
)
|
|
(97,636
|
)
|
|
21.0%
|
|
|
(175,240
|
)
|
|
(176,996
|
)
|
|
(1.0)%
|
|
Other Income
|
|
110,770
|
|
|
-
|
|
|
n/a
|
|
|
110,770
|
|
|
-
|
|
|
n/a
|
|
Net Loss
|
$
|
(7,361
|
)
|
$
|
(97,636
|
)
|
|
(92.5)%
|
|
$
|
(64,470
|
)
|
$
|
(176,996
|
)
|
|
(63.6)%
|
|
Revenue
We have not earned any revenues to date. We do not anticipate
earning revenues until such time as we enter into commercial production of our
mineral properties. We are presently in the exploration stage of our business
and we can provide no assurance that we will discover commercially exploitable
levels of mineral resources on our properties, or if such deposits are
discovered, that we will enter into further substantial exploration programs.
7
Expenses
Our operating expenses for the three and six months ended May
31, 2011 and 2010 consisted of the following:
|
|
|
|
|
|
|
|
|
|
|
Six
Months
|
|
|
Six
Months
|
|
|
|
|
|
|
Three Months
|
|
|
Three Months
|
|
|
Percentage
|
|
|
Ended
|
|
|
Ended
|
|
|
Percentage
|
|
|
|
Ended
|
|
|
Ended
|
|
|
Increase /
|
|
|
May 31,
|
|
|
May 31,
|
|
|
Increase /
|
|
|
|
May
31, 2011
|
|
|
May 31, 2010
|
|
|
(Decrease)
|
|
|
2011
|
|
|
2010
|
|
|
(Decrease)
|
|
Bank charges and interest
|
$
|
4,253
|
|
$
|
6,076
|
|
|
(30.0)%
|
|
$
|
7,402
|
|
$
|
11,288
|
|
|
(34.4)%
|
|
Consulting fees
|
|
14,050
|
|
|
-
|
|
|
100.0%
|
|
|
26,350
|
|
|
-
|
|
|
100.0%
|
|
Depreciation Expense
|
|
-
|
|
|
126
|
|
|
(100.0)%
|
|
|
-
|
|
|
252
|
|
|
(100.0)%
|
|
Filing and Regulatory
|
|
744
|
|
|
170
|
|
|
337.6%
|
|
|
1,967
|
|
|
1,049
|
|
|
87.5%
|
|
Finance Charges
|
|
-
|
|
|
23,106
|
|
|
(100.0)%
|
|
|
-
|
|
|
45,709
|
|
|
(100.0)%
|
|
Investor Relations
|
|
-
|
|
|
1,000
|
|
|
(100.0)%
|
|
|
-
|
|
|
1,000
|
|
|
(100.0)%
|
|
Management Fees
|
|
9,000
|
|
|
9,000
|
|
|
0.0%
|
|
|
18,000
|
|
|
18,000
|
|
|
0.0%
|
|
Mineral Property Exploration Costs
|
|
28,512
|
|
|
-
|
|
|
100.0%
|
|
|
26,119
|
|
|
1,569
|
|
|
1564.7%
|
|
Office and Administrative
|
|
5,479
|
|
|
6,209
|
|
|
(11.8)%
|
|
|
11,102
|
|
|
9,629
|
|
|
15.3%
|
|
Professional Fees
|
|
55,411
|
|
|
48,949
|
|
|
13.2%
|
|
|
83,256
|
|
|
82,000
|
|
|
1.5%
|
|
Website design
|
|
682
|
|
|
-
|
|
|
100.0%
|
|
|
1,044
|
|
|
3,500
|
|
|
(70.2)%
|
|
Write-off Mineral Property Costs
|
|
-
|
|
|
3,000
|
|
|
(100.0)%
|
|
|
-
|
|
|
3,000
|
|
|
(100.0)%
|
|
Total Operating Expenses
|
$
|
118,131
|
|
$
|
97,636
|
|
|
21.0%
|
|
$
|
175,240
|
|
$
|
176,996
|
|
|
(1.0)%
|
|
Our operating expenses during the quarter ended May 31, 2011
totaled $118,131 compared with $97,636 during the quarter ended May 31, 2010.
The increase in our operating expenses was primarily a result of increased
consulting fees, filing and regulatory, mineral property exploration costs,
professional fees and website design, This increase was partially offset by a
decrease in bank charges and interest, depreciation expense, finance charges,
investor relations, office and administrative and write-off mineral property
cost.
During the six months ended May 31, 2011, our operating
expenses decreased from $176,996 to $175,240 during the six months ended May 31,
2010. The decrease in our operating expenses was primarily a result of decreased
bank charges and interest, depreciation expense, finance charges, investor
relations, website design and write off mineral property cost. This decrease was
partially offset by an increase in consulting fees, filing and regulatory,
mineral property exploration costs, office and administrative and professional
fees.
Finance fees during the three and six months ended May 31, 2010
primarily relate to amortization of the discount resulting from the allocation
of proceeds to the warrants and the intrinsic value beneficial conversion
feature.
Management fees relate to fees paid or accrued to the directors
of Magellan Acquisition Corp., our wholly owned Nevada subsidiary.
Professional fees primarily relate to meeting our ongoing
reporting requirements under the Exchange Act.
We anticipate our operating expenses will increase if we
implement our exploration program on our mineral properties.
8
LIQUIDITY AND CAPITAL RESOURCES
Working Capital
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At
|
|
|
Percentage
|
|
|
|
At
May 31, 2011
|
|
|
November 30, 2010
|
|
|
Increase / (Decrease)
|
|
Current Assets
|
$
|
15,938
|
|
$
|
353
|
|
|
4,415.0%
|
|
Current Liabilities
|
|
(575,415
|
)
|
|
(535,964
|
)
|
|
7.4%
|
|
Working Capital Deficit
|
$
|
(559,477
|
)
|
$
|
(535,611
|
)
|
|
4.5%
|
|
Cash Flows
|
|
|
|
|
|
|
|
|
Six Months Ended May
|
|
|
Six Months Ended May
|
|
|
|
31,
2011
|
|
|
31,
2010
|
|
Cash Flows (Used In) Operating Activities
|
$
|
(107,908
|
)
|
$
|
(58,203
|
)
|
Cash Flows (Used In) From Investing Activities
|
|
40,604
|
|
|
(42,878
|
)
|
Cash Flows From Financing Activities
|
|
82,889
|
|
|
137,408
|
|
Increase (Decrease) In Cash During Period
|
$
|
15,585
|
|
$
|
36,327
|
|
The increase in our working capital deficit at May 31, 2011
from our year ended November 30, 2010 is a result of the fact that our sole
source of financing was in the form of short term loans. During the six months
ended May 31, 2011, we received a loan of $12,000 from a related party and a
loan of $85,500 from a third party. Both loans bear interest at a rate of 10%
per annum and are due on demand.
Future Financings
As at May 31, 2011, we had $15,938 cash on hand. Currently, we
do not have sufficient financial resources to complete our plan of operation for
the next twelve months. We have not earned any revenues to date and we do not
anticipate earning revenues in the near future. As such, our ability to complete
our plan of operation is dependent upon our ability to obtain substantial
financing in the near term. Any future financing that we obtain is expected to
be in the form of sales of our equity securities. If we are successful in
completing any equity financings, of which there is no assurance, our existing
shareholders will experience a dilution of their interest in our company. There
is a substantial doubt that we will be able to obtain financing in an amount
that is sufficient to enable us to complete our proposed plan of operation. If
we are not successful in raising sufficient financing, we will not be able to
complete our plan of operation. We do not have any specific alternatives to our
current plan of operation and have not planned for any such contingency. If we
are not successful in raising sufficient financing, our business may fail and
our shareholders may lose all or part of their investment.
Our Board of Directors have approved a private placement
offering of up to 3,000,000 units (the Units) at a price of $0.05 per Unit for
gross proceeds of up to $150,000. Each Unit is comprised of one share of our
common stock and one share purchase warrant, with each warrant entitling the
subscriber to purchase an additional share of our common stock for a period of
two years following the date of issuance at an exercise price equal to $0.10 per
share. This offering of Units is being made to investors who are not U.S.
Persons as defined in Regulation S. To date, we have issued 527,200 units for
proceeds of $26,360 under this offering. There are no assurances that any
additional units will be sold under this offering.
OFF-BALANCE SHEET ARRANGEMENTS
We have no significant off-balance sheet arrangements that have
or are reasonably likely to have a current or future effect on our financial
condition, changes in financial condition, revenues or expenses, results of
operations, liquidity, capital expenditures or capital resources.
CRITICAL ACCOUNTING POLICIES
Our significant accounting policies are disclosed in the notes
to our consolidated financial statements for the six months ended May 31, 2011
included in this Quarterly Report.
9
We have identified certain accounting policies, described
below, that are most important to the portrayal of our current financial
condition and results of operations.
Use of Estimates
The preparation of financial statements, in conformity with
generally accepted accounting principles, requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying disclosures. Actual results may differ from the estimates.
Exploration Stage Enterprise
Our financial statements are prepared using the accrual method
of accounting. Until such properties are acquired and developed, we will
continue to prepare our financial statements and related disclosures in
accordance with entities in the exploration stage.
Mineral Property Interests
We are an exploration stage mining company and have not yet
realized any revenue from our operations. We are primarily engaged in the
acquisition, exploration and development of mining properties. Exploration costs
are expensed as incurred regardless of the stage of development or existence of
reserves. Costs of acquisition are capitalized subject to impairment testing,
when facts and circumstances indicate impairment may exist.
We regularly perform evaluations of any investment in mineral
properties to assess the recoverability and/or the residual value of our
investments in these assets. All long-lived assets are reviewed for impairment
whenever events or circumstances change which indicate the carrying amount of an
asset may not be recoverable.
Management periodically reviews the carrying value of our
investments in mineral leases and claims with internal and external mining
related professionals. A decision to abandon, reduce or expand a specific
project is based upon many factors including general and specific assessments of
mineral deposits, anticipated future mineral prices, anticipated future costs of
exploring, developing and operating a production mine, the expiration term and
ongoing expenses of maintaining mineral properties and the general likelihood
that we will continue exploration on such project. We do not set a
pre-determined holding period for properties with unproven deposits; however,
properties which have not demonstrated suitable metal concentrations at the
conclusion of each phase of an exploration program are re-evaluated to determine
if future exploration is warranted, whether there has been any impairment in
value and that their carrying values are appropriate.
If an area of interest is abandoned or it is determined that
its carrying value cannot be supported by future production or sale, the related
costs are charged against operations in the year of abandonment or determination
of value. The amounts recorded as mineral leases and claims represent costs to
date and do not necessarily reflect present or future values.
Our exploration activities are subject to various laws and
regulations governing the protection of the environment. These laws are
continually changing, generally becoming more restrictive. We have made, and
expect to make in the future, expenditures to comply with such laws and
regulations.
The accumulated costs of properties that are developed on the
stage of commercial production will be amortized to operations through
unit-of-production depletion.
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK.
|
Not Applicable.
10
ITEM 4T.
|
CONTROLS AND PROCEDURES.
|
Disclosure Controls and Procedures
We carried out an evaluation of the effectiveness of our
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) as of May 31, 2011 (the Evaluation Date). This evaluation was
carried out under the supervision and with the participation of our Chief
Executive Officer and Chief Financial Officer. Based upon that evaluation, our
Chief Executive Officer and Chief Financial Officer concluded that our
disclosure controls and procedures were not effective as of the Evaluation Date
as a result of the material weaknesses in internal control over financial
reporting discussed in our Annual Report on Form 10-K for the year ended
November 30, 2010 (the 2010 Annual Report).
Notwithstanding the assessment that our internal control over
financial reporting was not effective and that there were material weaknesses as
identified in our 2010 Annual Report, we believe that our financial statements
contained in our Quarterly Report on Form 10-Q for the quarter ended May 31,
2011 fairly present our financial condition, results of operations and cash
flows in all material respects.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial
reporting that occurred during the quarter ended May 31, 2011 that have
materially affected, or that are reasonably likely to materially affect, our
internal control over financial reporting.
11
PART II - OTHER INFORMATION
ITEM 1.
|
LEGAL PROCEEDINGS.
|
None.
The following are some of the important factors that could
affect our financial performance or could cause actual results to differ
materially from estimates contained in our forward-looking statements. We may
encounter risks in addition to those described below. Additional risks and
uncertainties not currently known to us, or that we currently deem to be
immaterial, may also impair or adversely affect our business, financial
condition or results of operation.
If we do not obtain additional financing, our business will
fail.
As of May 31, 2011, we had $15,938 cash on hand and a working
capital deficit of $559,477. Our plan of operation calls for significant
expenses in order to meet our obligations under the option agreements to acquire
the CPG Project, Fish Claims and Golden Snow Property. There is no guarantee
that we will exercise our option.
Our Board of Directors have approved a private placement
offering of up to 3,000,000 units (the Units) at a price of $0.05 per Unit for
gross proceeds of up to $150,000. Each Unit is comprised of one share of our
common stock and one share purchase warrant, with each warrant entitling the
subscriber to purchase an additional share of our common stock for a period of
two years following the date of issuance at an exercise price equal to $0.10 per
share. This offering of Units is being made to investors who are not U.S.
Persons as defined in Regulation S. To date, we have issued 527,200 units for
proceeds of $26,360 under this offering. There are no assurances that any
additional units will be sold under this offering.
Obtaining financing would be subject to a number of factors
outside of our control, including market conditions and additional costs and
expenses that might exceed current estimates. These factors may make the timing,
amount, terms or conditions of financing unavailable to us in which case we will
be unable to complete our plan of operation on our mineral properties and to
meet our obligations under our option agreements.
We have yet to earn revenue and our ability to sustain our
operations is dependent on our ability to raise financing. As a result, our
accountants believe there is substantial doubt about our ability to continue as
a going concern.
We have a cumulative net loss of $1,134,538 for the period from
our inception on April 28, 2006 to May 31, 2011, and have no revenues to date.
Our future is dependent upon our ability to obtain additional financing. Our
auditors have expressed substantial doubt about our ability to continue as a
going concern given our accumulated losses. This opinion could materially limit
our ability to raise additional funds by issuing new debt or equity securities
or otherwise. If we fail to raise sufficient capital, we will not be able to
complete our business plan. As a result, we may have to liquidate our business
and investors may lose their investment. Investors should consider our former
auditor's comments when determining if an investment in us is suitable.
Because of the unique difficulties and uncertainties
inherent in mineral exploration ventures, we face a high risk of business
failure.
Investors should be aware of the difficulties normally
encountered by new mineral exploration companies and the high rate of failure of
such enterprises. The likelihood of success must be considered in light of the
problems, expenses, difficulties, complications and delays encountered in
connection with the exploration of the mineral properties that we plan to
undertake. These potential problems include, but are not limited to,
unanticipated problems relating to exploration, and additional costs and
expenses that may exceed current estimates.
12
We have no known mineral reserves and if we cannot find any,
we will have to cease operations.
We have no mineral reserves. If we do not find a mineral
reserve containing gold or if we cannot explore the mineral reserve, either
because we do not have the money to do it or because it will not be economically
feasible to do it, we will have to cease operations and you will lose your
investment. Mineral exploration, particularly for gold, is highly speculative.
It involves many risks and is often non-productive. Even if we are able to find
mineral reserves on our properties, our production capability is subject to
further risks including:
-
Costs of bringing the property into production including exploration work,
preparation of production feasibility studies, and construction of production
facilities, all of which we have not budgeted for;
-
Availability and costs of financing;
-
Ongoing costs of production; and
-
Environmental compliance regulations and restraints.
The marketability of any minerals acquired or discovered may be
affected by numerous factors which are beyond our control and which cannot be
accurately predicted, such as market fluctuations, the lack of milling
facilities and processing equipment near our mineral properties, and such other
factors as government regulations, including regulations relating to allowable
production, importing and exporting of minerals, and environmental
protection.
Given the above noted risks, the chances of finding reserves
on our mineral properties are remote and funds expended on exploration will
likely be lost.
Even if we discover proven reserves of precious metals on
our mineral properties, we may not be able to successfully commence commercial
production.
Our mineral properties do not contain any known bodies of ore.
If our exploration programs are successful in discovering proven reserves on our
mineral properties, we will require additional funds in order to place the
mineral properties into commercial production. The expenditures to be made by us
in the exploration of mineral properties in all probability will be lost as it
is an extremely remote possibility that the mineral claims will contain proven
reserves. If our exploration programs are successful in discovering proven
reserves, we will require additional funds in order to place the mineral
properties into commercial production. The funds required for commercial mineral
production can range from several millions to hundreds of millions. We currently
do not have sufficient funds to place our mineral claims into commercial
production. Obtaining additional financing would be subject to a number of
factors, including the market price for gold and the costs of exploring for or
mining these materials. These factors may make the timing, amount, terms or
conditions of additional financing unavailable to us. Because we will need
additional financing to fund our exploration activities there is substantial
doubt about our ability to continue as a going concern. At this time, there is a
risk that we will not be able to obtain such financing as and when needed.
We face significant competition in the mineral exploration
industry.
We compete with other mining and exploration companies
possessing greater financial resources and technical facilities than we do in
connection with the acquisition of mineral exploration claims and leases on
precious metal prospects and in connection with the recruitment and retention of
qualified personnel. There is significant competition for precious metals and,
as a result, we may be unable to acquire an interest in attractive mineral
exploration properties on terms we consider acceptable on a continuing
basis.
There is no assurance that we will be able to exercise our
option to acquire the CPG Project, Fish Claims and Golden Snow Property.
In order to exercise our option to acquire the CPG Project,
Fish Claims and Golden Snow Property, we are required to make a series of cash
payments and meet the annual claim maintenance fees. In order to meet these
payments we will need to obtain substantial financing. If we are unable to meet
these payments, we will lose our options to acquire these properties.
13
Because our sole executive officer does not have formal
training specific to the technicalities of mineral exploration, there is a
higher risk that our business will fail.
Richard W. Donaldson, our sole executive officer, does not have
any formal training as a geologist or in the technical aspects of managing a
mineral exploration company. With the exception of Howard Metzler, a director,
our management may not be fully aware of the specific requirements related to
working within this industry. As such, the loss of Mr. Metzlers services could
cause irreparable harm to our operations, earnings, and ultimate financial
success could suffer irreparable harm due to management's lack of experience in
this industry.
Because the prices of metals fluctuate, if the price of
metals for which we are exploring decreases below a specified level, it may no
longer be profitable to explore for those metals and we will cease
operations.
Prices of metals are determined by such factors as expectations
for inflation, the strength of the United States dollar, global and regional
supply and demand, and political and economic conditions and production costs in
metals producing regions of the world. The aggregate effect of these factors on
metal prices is impossible for us to predict. In addition, the prices of
precious metals are sometimes subject to rapid short-term and/or prolonged
changes because of speculative activities. The current demand for and supply of
these metals affect the metal prices, but not necessarily in the same manner as
current supply and demand affect the prices of other commodities. The supply of
these metals primarily consists of new production from mining. If the prices of
the metals are, for a substantial period, below our foreseeable cost of
production, we could cease operations and investors could lose their entire
investment.
We may conduct further offerings in the future in which case
investors shareholdings will be diluted.
We are currently offering units (common stock and share
purchase warrants) for gross proceeds of up to $150,000. Since our inception, we
have relied on such equity sales of our common stock to fund our operations. We
may conduct further equity offerings in the future to finance our current
projects or to finance subsequent projects that we decide to undertake. If
common stock is issued in return for additional funds, the price per share could
be lower than that paid by our current stockholders. We anticipate continuing to
rely on equity sales of our common stock in order to fund our business
operations. If we issue additional stock, the interests of existing shareholders
will be diluted.
The quotation price of our common stock may be volatile,
with the result that an investor may not be able to sell any shares acquired at
a price equal to or greater than the price paid by the investor.
Our common shares are quoted on the OTCQB under the symbol
"PNGM. Companies quoted on the OTCQB have traditionally experienced extreme
price and volume fluctuations. In addition, our stock price may be adversely
affected by factors that are unrelated or disproportionate to our operating
performance. Market fluctuations, as well as general economic, political and
market conditions such as recessions, interest rates or international currency
fluctuations may adversely affect the market price of our common stock. As a
result of this potential volatility and potential lack of a trading market, an
investor may not be able to sell any of our common stock that they acquire at a
price equal or greater than the price paid by the investor.
Because our stock is a penny stock, shareholders will be
more limited in their ability to sell their stock.
The SEC has adopted rules that regulate broker-dealer practices
in connection with transactions in penny stocks. Penny stocks are generally
equity securities with a price of less than $5.00, other than securities
registered on certain national securities exchanges or quoted on the Nasdaq
system, provided that current price and volume information with respect to
transactions in such securities is provided by the exchange or quotation system.
Because our securities constitute penny stocks within the meaning of the
rules, the rules apply to us and to our securities. The rules may further affect
the ability of owners of shares to sell our securities in any market that might
develop for them. As long as the trading price of our common stock is less than
$5.00 per share, the common stock will be subject to Rule 15g-9 under the
Exchange Act. The penny stock rules require a broker-dealer, prior to a
transaction in a penny stock, to deliver a standardized risk disclosure document
prepared by the SEC, that:
1.
|
contains a description of the nature and level of risk in
the market for penny stocks in both public offerings and secondary
trading;
|
14
2.
|
contains a description of the brokers or dealers duties
to the customer and of the rights and remedies available to the customer
with respect to a violation to such duties or other requirements of
securities laws;
|
|
|
3.
|
contains a brief, clear, narrative description of a
dealer market, including bid and ask prices for penny stocks and the
significance of the spread between the bid and ask price;
|
|
|
4.
|
contains a toll-free telephone number for inquiries on
disciplinary actions;
|
|
|
5.
|
defines significant terms in the disclosure document or
in the conduct of trading in penny stocks; and
|
|
|
6.
|
contains such other information and is in such form,
including language, type, size and format, as the SEC shall require by
rule or regulation.
|
The broker-dealer also must provide, prior to effecting any
transaction in a penny stock, the customer with: (a) bid and offer quotations
for the penny stock; (b) the compensation of the broker-dealer and its
salesperson in the transaction; (c) the number of shares to which such bid and
ask prices apply, or other comparable information relating to the depth and
liquidity of the market for such stock; and (d) a monthly account statements
showing the market value of each penny stock held in the customers account. In
addition, the penny stock rules require that prior to a transaction in a penny
stock not otherwise exempt from those rules; the broker-dealer must make a
special written determination that the penny stock is a suitable investment for
the purchaser and receive the purchasers written acknowledgment of the receipt
of a risk disclosure statement, a written agreement to transactions involving
penny stocks, and a signed and dated copy of a written suitably statement. These
disclosure requirements may have the effect of reducing the trading activity in
the secondary market for our stock.
ITEM 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND
USE OF PROCEEDS.
|
Other than as disclosed in our Current Reports on Form 8-K, we
have not completed any unregistered sales of equity securities.
ITEM 3.
|
DEFAULTS UPON SENIOR SECURITIES.
|
None.
ITEM 5.
|
OTHER INFORMATION.
|
None.
Exhibit
|
|
Number
|
Description of Exhibits
|
3.1
|
Articles of Incorporation.
(1)
|
3.2
|
Certificate of Change Pursuant to NRS 78.209 increasing
the authorized capital of common stock to 300,000,000 shares, par value
$0.001 per share.
(5)
|
3.3
|
Bylaws, as amended.
(1)
|
4.1
|
Specimen Stock Certificate.
(1)
|
10.1
|
Loan Agreement dated December 19, 2007 between the
Company (as the borrower) and Kahala Financial Corp. (as the
lender).
(2)
|
10.2
|
Purchase Agreement dated December 15, 2008 among Magellan
Acquisition Corp., Solfotara Mining Corp. and Magellan Copper and Gold plc
(Magellan Singapore Subsidiaries)
.
(4)
|
10.3
|
Purchase Agreement dated December 16, 2008 between the
Company and Bako Resources Inc.
(Clisbako Property)
.
(4)
|
15
Exhibit
|
|
Number
|
Description of Exhibits
|
10.4
|
Extension Agreement dated July
23, 2009 between the Company and Bako Resources Inc.
(7)
|
10.5
|
Assignment Agreement dated May 29, 2009 among the
Company, Portal Resources US Inc. and Portal Resources Ltd.
(Golden Snow
Project, Fish Project and CPG Project)
(6)
|
10.6
|
Agreement dated for reference November
2, 2009 executed on January 19, 2010 between the Company and Agus Abidin
(Manado Gold Property)
.
(8)
|
10.7
|
Second Extension Agreement dated January 21, 2010
between the Company and Bako Resources Inc.
(Clisbako Property)
.
(9)
|
10.8
|
Extension Agreement Dated January
21, 2010 between the Company and Agus Abidin
(Manado
Gold Property).
|
10.9
|
Option agreement dated February 5, 2010 between
the Company and Larry Sostad (
June Claims).
(10)
|
10.10
|
Third Extension Agreement dated
March 15, 2010 between the Company and Bako Resources Inc.
(Clisbako
Property).
(11)
|
10.11
|
Second Extension Agreement Dated March 29, 2010
between the Company and Agus Abidin
(Manado Gold Property).
(12)
|
10.12
|
Loan Agreement dated January 11,
2010 between the Company and Laverne Assets Group Corp. (13)
|
10.12
|
Agreement dated for reference April 23, 2010 executed
on April 28, 2010 between the Company and Bull and Bear Financial Report.
(14)
|
10.13
|
Option Agreement dated July 23,
2010 between the Clisbako Minerals Inc. and Interior Plateau Mining Corp.
(15)
|
10.14
|
Assignment Agreement dated August 24, 2010 between
the Company and Manado Gold Corp.
(16)
|
10.15
|
Option Agreement dated for September
15, 2010 between Clisbako Minerals Inc. and Manado Gold Corp.
(17)
|
10.16
|
Extension Agreement dated November 30, 2010 between
the Company and Manado Gold Corp.
(19)
|
10.17
|
2011 Stock Option Plan.
(18)
|
10.18
|
Option Agreement (Golden Snow) dated March 31,
2011 between the Company and Scoonover Exploration LLC and JR Exploration
LLC.
(20)
|
10.19
|
Option Agreement (CPG Project)
dated March 31, 2011 between the Company and Claremont Nevada Mines LLC.
(20)
|
10.20
|
Option Agreement (Fish Claims) dated March 31,
2011 between the Company and Claremont Nevada Mines LLC.
(20)
|
10.21
|
Earn-In Agreement (Golden Snow)
dated April 26, 2011 between the Company and Terrace Ventures Inc.
(20)
|
10.22
|
Extension dated May 12, 2011 to Letter Agreement
dated April 13, 2011 between the Company and Development Resources LLC.
(21)
|
10.23
|
Extension
Agreement dated June 29, 2011 between the Company and Terrace Ventures Inc.
|
14.1
|
Code of Ethics.
(3)
|
21.1
|
List of Subsidiaries.
(19)
|
31.1
|
Certification of Chief
Executive Officer and Chief Financial Officer as adopted pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.
|
32.1
|
Certification
of Chief Executive Officer and Chief Financial Officer as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.
|
Notes:
|
|
(1)
|
Previously filed as an exhibit to our
Registration Statement on Form SB-2 filed on April 24, 2007.
|
(2)
|
Previously filed as an exhibit to our Current
Report on Form 8-K filed on December 26, 2007.
|
(3)
|
Previously filed as an exhibit to our Annual
Report on Form 10-KSB filed on March 6, 2008.
|
(4)
|
Previously filed as an exhibit to our Current
Report on Form 8-K filed on December 22, 2008.
|
(5)
|
Previously filed as an exhibit to our Current
Report on Form 8-K filed on April 17, 2009.
|
(6)
|
Previously filed as an exhibit to our Current
Report on Form 8-K filed on June 2, 2009.
|
(7)
|
Previously filed as an exhibit to our Current
Report on Form 8-K filed on July 27, 2009.
|
(8)
|
Previously filed as an exhibit to our Current
Report on Form 8-K filed on January 21, 2010.
|
16
(9)
|
Previously filed as an exhibit to our Current Report on
Form 8-K filed on January 26, 2010.
|
(10)
|
Previously filed as an exhibit to our Current Report on
Form 8-K filed on February 11, 2010.
|
(11)
|
Previously filed as an exhibit to our Annual Report on
Form 10-K filed on March 16, 2010.
|
(12)
|
Previously filed as an exhibit to our Current Report on
Form 8-K filed on April 6, 2010.
|
(13)
|
Previously filed as an exhibit to our Quarterly Report on
Form 10-Q filed on April 19, 2010.
|
(14)
|
Previously filed as an exhibit to our Current Report on
Form 8-K filed on May 4, 2010.
|
(15)
|
Previously filed as an exhibit to our Current Report on
Form 8-K filed on August 10, 2010.
|
(16)
|
Previously filed as an exhibit to our Current Report on
Form 8-K filed on August 30, 2010.
|
(17)
|
Previously filed as an exhibit to our Quarterly Report on
Form 10-Q filed on October 20, 2010.
|
(18)
|
Previously filed as an exhibit to our Current Report on
Form 8-K filed on March 3, 2011.
|
(19)
|
Previously filed as an exhibit to our Annual Report on
Form 10-K filed on March 15, 2011.
|
(20)
|
Previously filed as an exhibit to our Current Report on
Form 8-K filed on April 27, 2011.
|
(21)
|
Previously filed as an exhibit to our Current Report on
Form 8-K filed on May 16, 2011.
|
17
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
|
|
|
|
PENGRAM CORPORATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Date:
|
July 20, 2011
|
|
By:
|
/s/
Richard W. Donaldson
|
|
|
|
|
RICHARD W. DONALDSON
|
|
|
|
|
Chief Executive Officer, Chief Financial
Officer,
|
|
|
|
|
President, Secretary, Treasurer,
|
|
|
|
|
(Principal Executive Officer
|
|
|
|
|
and Principal Financial Officer)
|
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